On 1 March, EIOPA published its yearend report 2016 on the functioning of colleges and priorities for 2017. The report details the experiences of the Colleges of Supervisors in 2016 and also contains a summary of what the overarching themes will be for 2017. The report is broken into: an overview of developments in 2016; EIOPA's observations; the accomplishments of themes for colleges; and conclusions and priorities going forward.
The implementation of Solvency II has resulted in a notable increase in quality and efficiency in information exchange as well as in the number of interactions and discussions in the meeting of Colleges of Supervisors. However, there is a need for more focus on the consistency and quality of internal models and Own Risk Solvency Assessment reports, the practices for enhanced risk assessment, sub-group supervision and honing the use of EIOPA's central repository.
The report also sets out the EIOPA Colleges Strategy 2016-2019, which states that given the resources available, EIOPA will focus on the following situations where:
» a potential failure of a supervised group would have significant impact on the financial market from a European perspective; and
» EIOPA's support is needed in order to coordinate the cross-border supervision of EEA undertakings belonging to groups based in nonEEA countries with no formal subgroup group structures at EEA level.
In 2017, the Colleges of Supervisors have been requested to focus on supervision of cross-border groups in the assessment of joint risks and also in the exchange of information. Of particular focus over the next year will be assessing the differences in the application of valuation principles, the use of options and their impact on group and major solo undertakings' financial and solvency position.
A link to the report is here.