Institutions II [EU]
European Insurance and Occupational Pensions Authority (EIOPA)
The 2008 financial crisis brought to light shortcomings in European Union (EU) financial supervision. Based in Frankfurt, the European Insurance and Occupational Pensions Authority (EIOPA) was created in 2010 to prevent the risks of destabilising the insurance sector.
Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC.
It sets up EIOPA, an EU body that supports coordination between national authorities and ensures the consistent application of EU laws for the insurance and occupational pensions sectors in EU countries.
Consistent application of law
EIOPA draws up regulatory and technical standards that accompany laws adopted by the Council and the European Parliament for insurance companies, financial conglomerates (large financial companies active in various financial sectors), occupational pensions and insurance intermediaries (businesses selling pensions and insurance policies). It also has the power to issue guidelines and recommendations on the application of European law.
Market trends
EIOPA is tasked with ensuring the stability of insurance markets and the protection of policyholders, pension scheme members and beneficiaries. For instance, it monitors consumer trends and assesses potential risks and vulnerabilities of the markets. Under certain strict conditions, it can temporarily prohibit or restrict financial activities that cause a threat to the stability of the financial system.
Breach of law
EIOPA has the power to investigate a breach of law by a national authority. This arises when the latter fails to ensure that a financial institution complies with European law.
Within 2 months, EIOPA can issue a recommendation to the national authority. Then the European Commission may issue a formal opinion requiring the authority to take the necessary action to comply with the law. If the national authority’s non-compliance persists, EIOPA may directly address a decision to a financial institution under certain strict conditions. This decision prevails over previous decisions taken by the national authority.
European financial supervision
EIOPA is part of the European System of Financial Supervision created in 2010, and which comprises three other supervisory organisations:
the supervisory authority in charge of the financial markets, based in Paris (European Securities and Markets Authority);
the supervisory authority in charge of the banking sector, based in London (European Banking Authority);
the European Systemic Risk Board responsible for the overall oversight of the EU’s financial stability, based in Frankfurt.
For more information, see the EIOPA website.
Reference
Act
Entry into force
Deadline for transposition in the Member States
Official Journal
Regulation (EU) No 1094/2010
16.12.2010
–
OJ L 331 of 15.12.2010, pp. 48-83
Corrigendum
–
–
OJ L 54 of 22.2.2014, pp. 23-23
Amending act
Entry into force
Deadline for transposition in the Member States
Official Journal
Directive 2014/51/EU
23.5.2014
31.3.2015
OJ L 153, 22.5.2014, pp. 1-61
RELATED ACTS
Council Regulation (EU) No 1096/2010 of 17 November 2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board (Official Journal L 331 of 15.12.2010, pp. 162-164).
Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 98/26/EC, 2002/87/EC, 2003/6/EC, 2003/41/EC, 2003/71/EC, 2004/39/EC, 2004/109/EC, 2005/60/EC, 2006/48/EC, 2006/49/EC and 2009/65/EC in respect of the powers of the European Supervisory Authority (European Banking Authority), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) (Official Journal L 331 of 15.12.2010, pp. 120-161).
Commission Decision 2004/9/EC of 5 November 2003 establishing the European Insurance and Occupational Pensions Committee (Official Journal L 3 of 7.1.2004, pp. 34-35).
European Securities and Markets Authority (ESMA)
Based in Paris, the European Securities and Markets Authority (ESMA) was created in 2010 to safeguard the stability of the European financial markets and address shortcomings in European financial supervision.
ACT
Regulation (EU) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC.
Based in Paris, the European Securities and Markets Authority (ESMA) was created in 2010 to safeguard the stability of the European financial markets and address shortcomings in European financial supervision.
It creates the ESMA, which is a European authority that strengthens the coordination between national regulators of financial markets and ensures the consistent application of EU financial legislation in EU countries.
Consistent application of law
ESMA draws up regulatory and technical standards based on EU financial legislation. It also has the power to issue guidelines and recommendations on the application of European law.
Consumer protection and financial activities
ESMA promotes transparency, simplicity and fairness in the markets to protect consumers of financial products. Among its tasks, it monitors financial activities and analyses consumer trends. Under certain strict conditions, it can temporarily prohibit or restrict financial activities that cause a threat to the stability of the markets.
Breach of law
ESMA can investigate a breach of law by a national authority. This arises when the latter fails to ensure that a financial market participant complies with European law.
Within 2 months, ESMA can issue a recommendation requiring the national authority to take the necessary action to comply with European law. Then, the European Commission may issue a formal opinion. If the national authority’s non-compliance persists, ESMA may directly address a decision to a financial market participant under certain strict conditions. This decision prevails over previous decisions taken by the national authority.
European financial supervision
ESMA is part of the European System of Financial Supervision created in 2010 and which comprises three other supervisory organisations:
— the European Insurance and Occupational Pensions Authority based in Frankfurt;
— the European Banking Authority based in London;
— the European Systemic Risk Board based in Frankfurt.
References
Act
Entry into force
Deadline for transposition in the Member States
Official Journal
Regulation (EU) No 1095/2010
16.12.2010
–
OJ L 331 of 15.12.2010, pp. 84-119
Amending act(s)
Entry into force
Deadline for transposition in the Member States
Official Journal
Directive 2011/61/EU
21.7.2011
22.7.2013
OJ L 174 of 1.7.2011, pp. 1-73
Directive 2014/51/EU
23.5.2014
31.3.2015
OJ L 153 of 22.5.2014, pp. 1-61
Regulation (EU) No 258/2014
9.4.2014
–
OJ L 105 of 8.4.2014, pp. 1-8
RELATED ACTS
Council Regulation (EU) No 1096/2010 of 17 November 2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board (OJ L 331 of 15.12.2010, pp. 162-164).
Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 98/26/EC, 2002/87/EC, 2003/6/EC, 2003/41/EC, 2003/71/EC, 2004/39/EC, 2004/109/EC, 2005/60/EC, 2006/48/EC, 2006/49/EC and 2009/65/EC in respect of the powers of the European Supervisory Authority (European Banking Authority), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) (OJ L 331 of 15.12.2010, pp. 120-161).
Directive 2011/61/EU of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives 2003/41/EC and 2009/65/EC and Regulations (EC) No 1060/2009 and (EU) No 1095/2010 (OJ L 174 of 1.7.2011, pp. 1-73).
Directive 2014/51/EU of the European Parliament and of the Council of 16 April 2014 amending Directives 2003/71/EC and 2009/138/EC and Regulations (EC) No 1060/2009, (EU) No 1094/2010 and (EU) No 1095/2010 in respect of the powers of the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) (OJ L 153 of 22.5.2014, pp. 1-61).