Enhancing the effectiveness of Supervisory Colleges

|Enhancing the effectiveness of Supervisory Colleges

Enhancing the effectiveness of Supervisory Colleges

In recent years, there have been substantial changes in the approach to supervision of insurance groups. There has been much debate on group capital requirements and risk management and reporting obligations. However, group supervision is not only about capital, but also the supervisory process. Colleges are a key element of group supervision and their practice has evolved in recent years. In October 2014, EIOPA published approved guidelines on the Operational Functioning of Colleges as part of the development of Solvency II. At the same time, the International Association of Insurance Supervisors approved its Application Paper on Supervisory Colleges. In mid-2014, the CRO forum established a working group to consider the practitioners’ perspective in order to provide feedback to supervisors, pan-regulatory bodies and other groups on how Colleges could be more effective. The working group carried out a survey of the CRO Forum members. The findings of that survey are set out in this paper. The central conclusions are that Colleges are a tool to build trust, facilitate an efficient flow of information and ensure good supervisory cooperation and coordination. Under Solvency II rules, Colleges are a very good tool to facilitate decision making concerning the supervision of a group. Our survey has shown that there are strong cultural differences within Europe as to how the group supervisor operates Colleges and in light of these differences we recommend some core principles of good practice for firms and others to improve the consistency of the way Colleges operate in practice. Late 2014 and early 2015 the working group wrote a cover note based on the discussions with EIOPA reflecting the implementations of guidelines. The aim is now to focus more on the practical good and bad examples for colleges in order to harmonize the work of supervisory colleges through Europe.

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2017-05-10T20:05:27+00:00