The European Insurance and Occupational Pensions Authority (EIOPA) published today its approach to supporting the objective of simplifying regulation and reducing administrative burdens for enhanced European competitiveness. To achieve a balanced and credible outcome, EIOPA calls for smarter, more harmonised regulation alongside more effective supervision at the EU level. This could create ideal conditions for European businesses to thrive in the Single Market while safeguarding consumer’ rights and maintaining financial stability.
Amid growing uncertainties and the emergence of a new geopolitical order, Europe must do more to foster a thriving and resilient economy while ensuring robust consumer protection and a level playing field for businesses.
EIOPA believes that simplification and burden reduction could be a meaningful catalyst for growth. Importantly, regulatory streamlining should aim at creating a stronger and more cohesive framework across the EU by eliminating unnecessary divergence across Member States. Regulatory simplification must prioritise EU interests over national ones, preventing market fragmentation through a holistic, long-term approach. It should by no means result in a mere shift of the regulatory burden and lead to new national obligations springing up where EU requirements have been reduced.
However, regulatory simplification must also not come at the expense of effective supervision. Therefore, EIOPA will carefully evaluate what data is essential for supervisory work.
Balanced approach, broader focus
EIOPA supports regulatory initiatives that foster a more competitive EU economy in a balanced and sustainable way. Within its own remit and even prior to the Commission’s initiative, EIOPA has been advancing regulatory simplification in all areas of its work by:
- shortening Solvency II guidelines,
- streamlining reporting templates and reducing data points for Solvency II reporting,
- introducing proportionality principles where possible,
- permanently reducing the frequency of stress tests for insurers and IORPs, and
- promoting the streamlining of requirements related to product disclosures, product design and sales processes.
On sustainability, EIOPA will support the Commission in simplifying Europe’s sustainability reporting while ensuring (re)insurers and pension funds access reliable and standardised data to manage climate risks.
Policymaking and supervision
Simplification should begin at the earliest stages of the EU legislative process as mandates defined in the regulation have real-life impacts in terms of industry obligations and supervisory responsibilities. Greater involvement from EIOPA during Level 1 negotiations, especially for horizontal legislation, would help to ensure solid technical input to co-legislators regarding the need for specific mandates. Certain areas could benefit from further harmonisation to eliminate the fragmentation and barriers to entry that minimum harmonisation regulation can give rise to.
To ensure a well-functioning Single Market, strong supervisory convergence is essential. In this context, a stronger mandate at the EIOPA Board level would help reduce complexity and enhance efficiency. In specific areas, such as the supervision of cross-border undertakings more consistent enforcement across jurisdiction could strengthen the overall effectiveness of supervision, promote a level playing field and lower administrative burdens – ultimately boosting competitiveness.
Petra Hielkema, Chair of EIOPA said: “Regulatory simplification and burden reduction is important and possible. Yet, it should be viewed as a means to an end, not as the end itself. The ultimate goal, after all, is to create a more resilient and competitive European economy, where businesses can flourish, consumers are well protected and financial stability is maintained. Efforts to simplify regulation must, in our view, strike the right balance, ensuring that streamlining leads to a stronger, more cohesive framework, rather than introducing new gaps, inconsistencies or unintended burdens elsewhere.”