On 30 May 2017, the European Insurance and Occupational Pensions Authority (EIOPA) published an interview given by its Chairperson Gabriel Bernardino to Insurance Asset Management Europe. The interview covered insurance topics such as supervisory convergence to the Ultimate Forward Rate/UFR and the macro-prudential framework. However, in the context of a post-Brexit environment where insurers based in the United Kingdom will no longer benefit from an EU “passport” of their authorisation into the European single market and where many UK based insurers are now looking to relocate to an EU Member State, it is Bernardino’s comments on Brexit that are of particular interest.
Bernardino said that EIOPA's oversight team is visiting national supervisory authorities engaged in discussions with UK firms seeking to relocate. He said sound supervision demands appropriate location of management and key functions, and that relocations without substance are not acceptable.
“Empty shells or letter boxes are not acceptable. Sound supervision demands appropriate location of management and key functions including sound outsourcing and reinsurance policies”.
He also confirmed that EIOPA intends to publish guidance for national supervisory authorities on sound principles for authorisation and supervision and will subsequently monitor their implementation across Europe. He further stated that EIOPA is closely watching possible effects on financial stability and consumers.