Following changes in 2019 in the Solvency II directive, EIOPA has the power to set up and coordinate collaboration platforms to enhance collaboration between the relevant supervisory authorities where a (re)insurance undertaking carries out, or intends to carry out, cross-border activities based on the freedom to provide services or the freedom of establishment. For these platforms, the criterium is not significant cross-border activity from the point of view of the home supervisor, but relevance to the host Member State market. Around ten of these platforms have been set up since then. However, in several cases, according to the European Commission, supervisors have failed to reach a common view on how to address issues related to such cross-border business. Hence, the European Commission proposes to further enhance EIOPA’s role: the home supervisor must inform EIOPA and the relevant host supervisors if it identifies deteriorating financial conditions or other emerging risks which may have a cross-border effect. The host supervisor may notify EIOPA and the home supervisor if it has serious consumer protection concerns. The idea is to find a bilateral solution between home and host supervisors while EIOPA stands ready on the side Will that work? This is part two of Lieve Lowet’s latest blog on Solvency II (see related items for part 1). Continue reading…

Since the introduction of Solvency II, there have been very few failures in the insurance sector. Because some failures had cross-border consequences, there has been pressure to change the present regulatory regime in order to give more powers to host supervisors and to EIOPA. Although the functioning of the internal market in insurance can certainly be improved, care must be taken not to overload the barge and to respect the approach that was agreed in the nineties for all financial service operators, i.e. a single market with a single license (European passport) and home country control. Failures are in a way a proof that market mechanisms are working. But in the financial services area, failures are more undesirable than in the rest of the services sector, especially in a cross-border context exercised via the freedom of establishment or the freedom to provide services (FPS). Despite the fact that Solvency II was not conceived as a zero-failure regime and that few failures have occurred in practice, the European Commission, pushed by EIOPA, is proposing important amendments to the present regime for insurers that operate cross-border, justified by supervisory shortcomings and a varying degree of policyholder protection across the EU following these failures. This is part one of Lieve Lowet’s latest blog posts on Solvency II. Part 2 will be published this Wednesday. Continue reading…

Whistleblowing comes in many shapes and forms and is often seen as devastating for the organisation to which the allegations are directed. One amongst many examples is the recent Facebook whistleblower Frances Haugen. Many times, this includes the whistleblower talking to the media. In this article, we will explore why internal whistleblowing is superior to external such and why it’s essential for every organisation to enable their employees to report internally. Although we cover the differences between internal and external whistleblowing in other articles here is a brief overview of the differences. Internal whistleblowing is when an employee reports errors, corruption or malpractice within the organisation, i.e. internally. The employee uses the organisation’s own whistleblowing solution to highlight the issue. External whistleblowing is when a person blows the whistle externally instead of internally. This can be, for example, to the media, authorities or in social media. Common reasons why people choose external whistleblowing include that they have little faith in their own organisation, or because they have tried to blow the whistle internally without seeing any fundamental changes. Continue reading…