The European Insurance and Occupational Pensions Authority (EIOPA) published today its 2021 Supervisory Convergence Plan. In 2021 EIOPA intends to complete the priorities stemming from the previous plan, while allowing for flexibility to continue monitoring and mitigating the impact from the Covid-19 pandemic. Similarly to the previous plan, the priority areas fall within the following building blocks:
- Practical implementation of the common supervisory culture and further development of supervisory tools;
- Risks to the internal market and the level playing field which may lead to supervisory arbitrage; and
- Supervision of emerging risks.
In the area of practical implementation of the common supervisory culture, EIOPA will, amongst other priorities, continue working on common benchmarks for the supervision of internal models, supervisory assessments of conduct risks but also work on the areas where the need for further development was identified, for example the application of proportionality in Solvency II.
Furthermore, EIOPA intends to continue working on supervisory convergence tools such as assessing internal models outcomes or promoting supervisory convergence in Technical Provisions’ calculation. The work related to the supervision of emerging risks will advance for example by developing a set of principles of digital responsibility, by establishing a system for the exchange between National Competent Authorities of information regarding cybersecurity and cyber-attacks as well as by implementing objectives and goals set in the Cyber Underwriting Strategy defined in February 2020.
EIOPA also identified three new priorities for 2021 and will take the following actions:
- Take step-by-step measures for integrating the environmental, social and governance risks into prudential and conduct supervision;
- Address supervisory concerns arising from the recent market development of multi-employer IORP providers; and
- Further analyse and identify potential risks to the internal market following the identification of inconsistencies in the way national competent authorities treat reinsurance undertakings with the head office located in third countries.
Further information about a common supervisory culture and EIOPA’s supervisory convergence tools, including the list of all priorities is available in the plan.