European Insurance and Occupational Pensions Authority (EIOPA)

SUMMARY OF:

Regulation (EU) No 1094/2010 establishing the European Insurance and Occupational Pensions Authority (EIOPA)

WHAT IS THE AIM OF THE REGULATION?

It sets up EIOPA, a European Union (EU) body that supports coordination between national authorities and ensures the consistent application of EU laws for the insurance and occupational pensions sectors in EU Member States.
Its aim is to promote financial stability and the public’s trust in the insurance and pensions markets.
It seeks to protect the rights of policyholders, pension scheme members and beneficiaries.

KEY POINTS

Consistent application of law

EIOPA draws up regulatory and technical standards that accompany laws adopted by the Council and the European Parliament for:
- insurance and reinsurance companies;
- financial conglomerates (large financial companies active in various financial sectors);
- occupational pensions;
- insurance intermediaries (businesses selling pensions and insurance policies).
It also has the power to issue guidelines and recommendations on the application of relevant EU law.

Market trends

To ensure the stability of insurance markets and to protect policyholders, pension scheme members and beneficiaries, EIOPA carries out a range of tasks. These include monitoring consumer trends and assessing potential market risks and vulnerabilities.
Under certain strict conditions, EIOPA can temporarily prohibit or restrict financial activities that cause a threat to the financial system’s stability or have the potential to cause significant financial damage to customers or consumers.

Breaches of law

EIOPA has the power to investigate a breach of law by a national authority, when a national authority fails to ensure that a financial institution complies with EU law.
Within 2 months, EIOPA can issue a recommendation to the national authority. The European Commission may then issue a formal opinion requiring the authority to take the necessary action to comply with the law. If the national authority still does not comply, EIOPA may directly address a decision to a financial institution under certain strict conditions. This decision prevails over previous decisions taken by the national authority on the same matter.

Supervisory convergence

Amending Regulation (EU) 2019/2175 enhanced the scope of EIOPA’s role and responsibilities. It ensures that EIOPA:

is able to assist national supervisors in the use and authorisation of internal models — used by insurance companies to calculate requirements on solvency capital — thus helping to achieve more convergent outcomes across the Member States;
can promote convergent supervisory practices within the EU’s internal market and assist competent authorities to protect insurance policyholders in cross-border disputes with the introduction of collaboration platforms — to be set up whenever competent authorities see the need for coordination in the light of specific market developments — and improved information exchange between the different supervisors of insurance firms operating cross-border;
with the other European supervisory authorities (ESAs), assesses the work of the national supervisors (peer reviews) and publishes reports to encourage compliance and increase transparency;
in the event of money laundering or terrorist financing by financial sector operators or competent authorities within its remit, gives its prior agreement where a decision is to be taken by the European Banking Authority (which has overarching powers in this field with respect to all the ESAs).

FROM WHEN DOES THE REGULATION APPLY?

Regulation (EU) No 1094/2010 has applied since 1 January 2011 (apart from its Article 76 on preparatory actions and Article 77(1) and (2) on transitional staff provisions which apply from 16 December 2010).
Amending Regulation (EU) 2019/2175 has applied since 1 January 2020.

BACKGROUND

For further information, see:

About EIOPA (EIOPA).

MAIN DOCUMENT

Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, pp. 48–83).

Successive amendments to Regulation (EU) No 1094/2010 have been incorporated in the original text. This consolidated version is of documentary value only.