By Ariane Poulain
On 18 July, BNE and Aviva brought together a distinguished panel of speakers to discuss The European Insurance and Occupational Pensions Authority (EIOPA). Nikki Tait, Financial Times journalist, chaired the panel which included Gabriel Bernardino, Chairman of EIOPA, Pat Regan, Chief Financial Officer of Aviva, Andrew Bailey, Executive Director at the Bank of England and Mary Trussell, Partner at KPMG. This was BNE’s third and final panel discussion in a series on the European Supervisory Authorities (ESA).
At Aviva’s London Headquarters, John McFarlane, Aviva’s Chairman, welcomed speakers and attendees to the event which sought to examine EIOPA’s competencies, how it foresees using its powers in relation to national authorities, such as the UK’s Financial Services Authority, and more generally, how EIOPA will find its place in the new financial supervisory structure alongside the European Banking Authority (EBA) and the European Securities and Markets Agency (ESMA).
Gabriel Bernardino began the discussion and stated that bringing stability to markets was crucial. He emphasised that whilst going from regulations to supervision was hard, the creation of the ESAs was a “landmark” and an important step in creating and fulfilling the European single market.
Commenting on EU policy-making in the insurance sector, Bernardino said that it is “a global business and needs to be viewed from an international perspective” and on pensions specifically, he noted they are “quite different from Solvency II and required a more risk-based framework.” Consumer protection, one of the five areas of EIOPA, is a priority at the European level and EIOPA was the first ESA to establish consumer protection guidelines, he added. On one of the other areas, oversight, Bernardino explained about peer review and he also outlined the issue of resources available to EIOPA as fundamental to its progress, mentioning that EIOPA only has 76 members of staff.
Pat Regan said that work on EIOPA is an “evolving landscape” and the question was really ‘how’ you regulate pensions across Europe. He stated that EIOPA has an important role in balancing all issues and concerns, from stimulating the real economy to health and education. Regan also reiterated Bernardino’s comment that Solvency II has quite a different role to EIOPA itself; he emphasised that Aviva support for Solvency II continues and they are keen to see a timetable put forward which reflects the economic realities to prevent a more delayed Solvency II timetable.
Andrew Bailey argued that insurance is an easy response to the crisis because whilst the EBA has a role in the new supervisory structure, EIOPA has the tools necessary to provide better supervision. He said that, “supervision is how you apply the rules.” Agreeing with Bernardino, Bailey said there was too little reference to the need to preserve and enhance the single market and that its major benefits could be all too easily forgotten. The main issue to deal with and overcome is striking the right balance between clashing private and public interests.
Mary Trussell began by following up on Bernardino’s point about the importance of consumer protection in insurance alongside its role as a necessity. Trussell explained how she arrived earlier that day in London on a flight from the Netherlands and that her plane would not have taken off without insurance; Trussell used this example to highlight how there is not enough emphasis on the value of insurance and the significant contribution it makes to society during difficult economic times. She also noted the importance of providing transparency in regulatory frameworks to boost consumer accessibility. Across the insurance sector, and pensions specifically, Trussell believed that all would agree that greater consistency is vital, particularly as Solvency II moves towards implementation.