Source: European Union
The European Insurance and Occupational Pensions Authority (EIOPA) published today its criteria for assessing the independence of supervisory authorities.
The independence of supervisory authorities is crucial for the legitimacy and credibility of the supervisory process. For public bodies, independence and good governance are necessary to avoid possible conflicts of interest and to reduce the likelihood of undue external influence on supervisory decisions.
The criteria provide clarity for supervisory authorities on EIOPA’s expectations. Taking on board the relevant articles in the Solvency II and IORP II Directive, international standards and supervisory experiences, they specify further the principles of operational, financial and personal independence as well as transparency and accountability.
As a next step, EIOPA plans to assess supervisory authorities’ independence, for example with the use of dedicated peer reviews. By doing this, EIOPA aims to ensure the consistent application of legislation, to preserve financial stability and to protect consumers.
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Following the review of the European Supervisory Authorities and the revision of the EIOPA regulation, EIOPA has an obligation to foster and monitor supervisory independence of national competent authorities (NCAs). The EIOPA regulation sets out that peer reviews shall be used as a tool for the assessment of the degree of independence and governance arrangements of NCAs.
In line with the Article 81 of the EIOPA regulation, EIOPA will also publish a report that will take stock of the situation on independence of national supervisory authorities along key aspects i.e. operational independence, financial independence, personal independence as well as accountability and transparency.