The European Insurance and Occupational Pensions Authority (EIOPA) has published today its Strategy towards a comprehensive risk-based and preventive framework for conduct of business supervision. The document outlines EIOPA's strategic approach as well as the tools it proposes to use to implement this framework.
A key element of the Strategy is "smart regulation", which focuses on outcomes that are relevant to consumers and moves away from a legalistic, "tick-box" approach. More specifically, "smart regulation" is based on a two pronged approach, which is:
- Risk-based, i.e. identifying the depth and scale of issues and focuses priorities and resources where they matter most.
- Preventive, i.e. anticipating consumer detriment early and, thereby, tackling the problems of the future, rather than of the past.
Strengthening conduct of business supervision is important for consumers and for the EU economy as a whole. It aims to protect consumers from unfair and abusive business practices by identifying tangible risks at an early stage to ensure they are adequately tackled before fully materialising and it promotes the orderly functioning of markets resulting in a level playing field, healthy competitive environment, increased consumer confidence and financial stability.