CEIOPS claims ‘clear evidence’ of improved supervisory cooperation

Colleges are designed to enable the efficient cross-border supervision as the lead is taken by the home state supervisor in consultation with those in the other states in which the insurer operates.

If the colleges can be made to work properly then insurers will be saved considerable time, cost and pain, particularly as Solvency II, the planned new capital adequacy regime, enters into force in 2012.

CEIOPS’ latest report is based on data collected from all member supervisory authorities that supervise the 108 insurance groups that operate cross-border activities within the European Economic Area (EEA).

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The committee, which advises the European Commission on Solvency II and will soon become a more powerful pan-European body that will co-ordinate cross-border activity and settle disputes, said that the most notable results were:

• 43% of the colleges have designed a concrete and precise work plan to coordinate supervisory work of the different members of the college.
• 80% of the colleges for the largest groups have reported inspections are regularly planned and co-ordinated within the college. This includes joint inspections or sharing of on-site inspection findings within the college.
• 81% of lead supervisors of cross-border insurance groups that are part of a financial conglomerate involve supervisory authorities responsible for the supervision of the other sectors in the colleges.
• 95% of colleges that have met in 2009 observed the CEIOPS recommendation for meeting practical arrangements and follow CEIOPS colleges guidelines when coordinating the gathering of information.
• 95% of colleges that have met in 2009 assessed the group control and risk management framework, monitored and discussed on intra-group transactions and the assessment of the group solvency position.

CEIOPS said, however, that there are still areas for ‘further improvements’ to ensure that supervision of cross-border insurance groups meets current and future E.U. regulatory standards. The committee said that it has therefore agreed an action plan for colleges.