EU insurance supervision demands more powers
The head of the EU insurance regulator EIOPA is calling for more power for the Frankfurt-based authority in view of the industry's increased international networking. Calls for a European supervisor are growing louder, said Petra Hielkema at an EIOPA conference in Frankfurt.
"We must be able to intervene at an early stage if national supervisors fail to prevent harm to consumers," she demanded. In such cases, the EIOPA Administrative Board - i.e. the 27 heads of the national supervisory authorities and herself - must "at least have the same powers" as the authorities at national level.
The Dutchwoman is hoping for the new composition of the EU Parliament and the EU Commission after next year's European elections. This is "an opportunity". The next EU Commission must ensure that not only the regulatory framework, but also the supervision itself is up to date - after all, it is an industry that is responsible for the long-term investments that are needed for the upcoming changes.
Although EIOPA, which is based in Frankfurt, has acted as the industry's regulator and coordinator to date, supervision - unlike for banks - is the sole responsibility of national authorities such as the German BaFin. "If we want to be a strong, competitive industry, we need to be more integrated than we have been so far," said Hielkema. There are areas where the European insurance market does not work and where it takes too long for the supervisory authority to intervene. Although EIOPA already uses its powers in these cases, it achieves too little and comes far too late. "We have to change that."
More than ten percent of premium income comes from cross-border business, and the percentage continues to rise, said Hielkema. Insurers can do business throughout the EU with their national licenses, while the supervisory authority only operates in the respective country. This results in "dysfunctions", for example with regard to unsustainable business models that are only geared towards rapid growth and profit instead of creating value for customers. Malfunctions also arise when supervisors in the home and host countries are poorly coordinated or unwilling to act.
"Given the early signs of potential issues, it's crucial for EU insurance supervision to intervene promptly if national supervisors fall short in protecting consumers' interests." In such scenarios, "the EIOPA Administrative Board should at least possess equivalent powers to those held by national supervisory authorities."
Source: www.ntv.de
