CEIOPS Annual Report 2010EIOPA Work Programme 20113L3 Annual Report 2010

CEIOPS Annual Report 2010EIOPA Work Programme 20113L3 Annual Report 2010

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9.3 SupervisoryPractices:PreparationofSupervisorstoImplementSolvencyII........................................................................................... 44

9.4 SupervisoryPractices:PeerReview................................................................... 46 9.5 Staffexchanges....................................................................................................... 46 10 ReviewPanel..................................................................................................................... 48 11 ConsumerProtection..................................................................................................... 50 12 OtherActivities................................................................................................................ 54 12.1 Accounting................................................................................................................ 54 12.2 InternationalRelations.......................................................................................... 54 12.3 RegulatoryDialogues............................................................................................ 54 12.4 CEIOPSConference................................................................................................. 55 12.5 WebSite..................................................................................................................... 57 12.6 Training....................................................................................................................... 57 13 Cross-SectorWork........................................................................................................... 60 13.1 3L3providedinputinpreparingnewEuropeanfinancial

supervisoryframework......................................................................................... 60 13.2 3L3TaskForceonCross-SectorRisks................................................................ 62 13.3 Anti-MoneyLaunderingTaskForce................................................................... 63 13.4 3L3workonFinancialConglomerates............................................................. 64 13.5 InternalGovernance.............................................................................................. 66 13.6 Jointworkonnon-cooperativejurisdictions................................................. 68 13.7 3L3JointTaskForceonPackagedRetailInvestmentProducts(PRIPs).. 68 13.8 FosteringConvergencethrough3L3training............................................... 69 14 EIOPAWorkProgramme................................................................................................ 72 14.1 Introduction.............................................................................................................. 72 14.2 Insurance................................................................................................................... 74 14.2.1 SolvencyII....................................................................................................... 74 14.2.2 GroupissuesunderthecurrentInsuranceGroupsDirective........ 78 14.2.3 Equivalence.................................................................................................... 79 14.3 Occupationalpensions.......................................................................................... 79 14.4 Financialstability.................................................................................................... 80 14.5 Consumerprotection............................................................................................. 82 14.6 Cross-bordercrisismanagementandsolutionandcolleges................... 83 4.6.1 Crossbordercrisismanagement............................................................. 83 14.7 Colleges...................................................................................................................... 85 14.8 Supervisoryculture,convergenceandcooperation.................................... 85 14.8.1 Supervisoryculture...................................................................................... 85 14.8.2 Supervisorypractises.................................................................................. 86 14.9 Furtherareasofwork............................................................................................ 87 14.9.1 Accounting..................................................................................................... 87 14.9.2 Internationalrelations................................................................................ 87 14.9.3 Transition........................................................................................................ 87 A Annexes.............................................................................................................................. 88 A1: CEIOPSroleintheLamfalussyprocedure....................................................... 88 A2: Financialstatements............................................................................................. 89 A3: ListofCEIOPSMembersandObservers.......................................................... 90 A4: ListofAbbreviations.............................................................................................. 95 A5: Endnotes.................................................................................................................... 96

1 ForewordfromtheChairman....................................................................................... 6 2 MessagefromtheSecretaryGeneral......................................................................... 8 3 CEIOPSOverview............................................................................................................... 10 3.1 Introduction............................................................................................................... 10 3.2 ManagingBoard....................................................................................................... 11 3.3 MembersMeeting................................................................................................... 12 3.4 ConsultativePanel................................................................................................... 14 3.5 PermanentCommitteesandExpertGroups.................................................. 15 3.6 CEIOPSSecretariat................................................................................................... 16 3.7 CEIOPSandthePoliticalInstitutions................................................................. 18 3.7.1 CEIOPScontributiontothereformoftheEU

financialsupervisoryarchitecture........................................................... 18 3.7.2 CEIOPSandtheCounciloftheEuropeanUnion............................... 18 3.7.3 CEIOPSandtheEuropeanCommission................................................. 19 3.7.4 CEIOPSandothers......................................................................................... 19 4 EIOPA–thenewAuthority............................................................................................ 20 5 Accountability,TransparencyandConsultation.................................................... 22 5.1 Introduction............................................................................................................... 22 5.2 PublicConsultations............................................................................................... 23 6 Insurance............................................................................................................................. 24 6.1 Introduction............................................................................................................... 24 6.2 SolvencyIIOverview.............................................................................................. 24 6.2.1 StandardFormulaCapitalRequirements............................................. 26 6.2.2 TechnicalProvisions.................................................................................... 27 6.2.3 Valuationofassetsandliabilities(excl.Technicalprovisions)...... 28 6.2.4 OwnFunds...................................................................................................... 28 6.2.5 InternalModels............................................................................................. 29 6.2.6 FifthQuantitativeImpactStudy............................................................. 30 6.2.7 InsuranceGroups......................................................................................... 32 6.2.8 Equivalence.................................................................................................... 34 7 OccupationalPensions.................................................................................................. 36 8 FinancialStability............................................................................................................ 40 8.1 InsuranceStressTest.............................................................................................. 43 9 SupervisoryCulture,ConvergenceandCooperation.......................................... 44 9.1 SupervisoryCultureandConvergence............................................................. 44 9.2 SupervisoryPractices:Mediation....................................................................... 44

TAbLE Of COnTEnTS

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1 fOREWORd fROm ThE ChAIRmAn

frameworkforEuropeanPensions.TheoverarchingobjectivesofthepensionreformswillbetostrengthentheEUinternalmarketforpensionsandtoensurethatpensionsystemsareadequateandsustainable,deliveringsecurityinretirementtomillionsofEUcitizens.Weacknowledgethatpensionsareacomplextopicandvariousimpactsneedtoberecognized.IbelievethatCEIOPS’workhasprovidedtoallofusabetterunderstandingofthedifferentregimesandwillbeofutmostrelevancefortheworktocome.Itssuccessor,EIOPAanditsMembersareasourceofconsiderableexpertiseand information about pensions matters and stands ready to assist the EuropeanCommissioninthisarea.

CEIOPSworkedhardtoexpandcapacities,addexpertiseandinfrastructureandlaidthegroundworktorespondtothenewtasksandpowersunderEIOPA.ThenewAu-thoritywillbediligentinthefieldofcolleges,consumerprotection,crisismanage-mentandwillassumeanenhancedinternationalrole.TheexistingmechanismsforLevel3cooperationwillbeformalizedunderaJointCommitteewiththerighttoiniti-atetheproposalofdraftregulatorystandards,thuscontributingtothecreationofasingleEUrulebook.

TheEUhasputforwardambitiousandcomprehensiveproposalsforreformingfinan-cialsupervision.It’sabravenewworld.Weareready.

GabrielBernardino

Itiswithregretbutalsopridetonotethatthisisthelastannualreportpublishedby CEIOPS, the Committee of European Insurance and Occupational Pensions Su-pervisors.Bythetimeyoureadthesepages,theCommitteehasbeensucceededbyEIOPA,theEuropeanInsuranceandOccupationalPensionsAuthority.Theformationof EIOPA, which is part of the new European System of Financial Supervision, is amilestoneboundtoachieveeffectiveandconsistentregulationandsupervision,tak-ingintoaccountthevaryinginterestsofallMemberStatesandthedifferentnatureoffinancialinstitutions.StrengtheningfinancialsupervisionintheEuropeanUnionhasonemaingoal:tosupportthestabilityofthefinancialmarketsinordertoprotectpolicyholders,pensionschememembersandotherbeneficiaries.

Looking back to 2010, it is probably not surprising that Solvency II again was oneof themainprojects thatabsorbedmuchofourattention.CEIOPS isperhapsbestknownforitscontributionstothisproject,whichhasspannedmuchofCEIOPS’exist-ence,sinceitsfoundationbackin2004.CEIOPScontinuestostronglybelievethatSol-vencyII,asamodernrisk-orientedregime,istheanswertothemainquestionsposedbythecrisis.ButthereisstillmuchtodobeforetheimplementationofSolvencyIIin2013.Iwouldarguethatweshouldfindaprudentbalancedapproachtothecali-brationofcapitalrequirements.ThesecondelementthatIfindfundamentalisthereassessmentofthelevelofcomplexityandfinally,thedevelopmentofappropriatetransitionalmeasures.TheanalysisoftheQIS5exerciseanditsfinalreportwillshedsomelightonthesequestions.AndEIOPAwillplayanactiveroleinassuringthatEUinsurancesupervisorsadoptaconvergentapproachtoSolvencyII.

Ofcourse,SolvencyII isnottheonlyimportantpolicyareainthefieldofEUinsur-ancesupervision.Overthenext12months,wecanexpectotherimportantlegislativeinitiativesfromtheEuropeanCommission,suchasarevisedInsuranceMediationDi-rectiveandproposalsforregulatingthedisclosureandsaleofPackagedRetailInvest-mentProducts.EIOPAwillbereadytocontinuetheworkonthesedifferentsubjects.

AndithasbeenabusyyearforCEIOPSinitsothercoreareaofresponsibility:Occu-pationalPensions.TheEuropeanCommission’sGreenPaperonpensionsmarksthestartofaprocesstomodernizeandfurtherintegratetheregulatoryandsupervisory

Gabriel BernardinoCEIOPSChairmanISP,Portugal

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2 mESSAgE fROm ThE SECRETARy gEnERAL

Convergence has also been of increasing importance in the work of our three Level 3Committees (3L3). To ensure cross-sectoral consistency in the activities of all 3L3Committees,wecoordinatedcloselyintheareaoffinancialconglomeratesandothercross-sectoralmatters.Cooperation,jointworkandregularexchangeofinformationwithitssisterorganizationswillremainacommitmentforCEIOPSanditssuccessorEIOPA.

Wearedelightedtoprovideasummaryofallouractivitiesandachievementswiththisreport.Noneofthisworkwouldhavebeenpossiblewithouttheactiveandvalu-ablesupportofCEIOPS’Members.While2010isthelastformalyearforCEIOPS,IamconfidentthatwewillexperienceasmoothtransitionintoEIOPA.Withastrength-enedteamandthecontinuedsupportofallMembers,EIOPAwillcontinuetoachieveitstargets.

CarlosMontalvoRebuelta

AtCEIOPS,wecompletedanexcitingandeventfulyear.Notonlyhas2010beenanimportant,but–notsurprisingly–averybusyyearwithsignificantemphasisonis-suesofconvergence,financialstabilityandconsumerprotection.Itneededadedicat-ed,diligentandskilledteamtodeliveronthehighexpectationsthatwereputonus.

Throughout2010,wehadthepleasuretohavebeeninvolvedinthetransitiontothenewEuropean InsuranceandOccupationalPensionsAuthority (EIOPA),partof thenewEuropeanSystemofFinancialSupervisorsthatwillassumeallofthetasksandcompetencesofCEIOPS.Toprepareforthisimportantstep,wefirstandforemostin-vestedinfurtherstrengtheningourteamandalmostdoubledthenumberofexpertsintheCEIOPSSecretariat.Anotherimportantcomponentisourtechnology.Weputgreateffortintofurtherdevelopingourinfrastructureandwebsite,whichpositionsuswellforfuturedemands.

OneofthemajorregulatoryprojectsremainsSolvencyII.Whilethisprojectinvolvesmanydifferentaspects,IwouldliketohighlightthefifthQuantitativeImpactStudy(QIS5).BytheendofDecember2010,wehadcompletedthefirstphaseofthestudyandwereproudtoconfirmthatalmost70%ofallinsuranceandreinsurancecom-paniesunder thescopeof theSolvency IIdirectiveparticipated inQIS5.That isanincreasefromthefourthQuantitativeImpactStudythatwasconductedin2008andrepresentsasignificantmarketshare.WeappreciatethebroadparticipationoftheindustrybecausethisisakeyfactortoensurethatcurrentoptionstestedunderQIS5areproperlytakenforward.TheresultsfromQIS5willprovidevaluableinputtohelprefinethecalibrationoftheSolvencyCapitalRequirementstandardformulaaswellastherequirementsfortechnicalprovisionsandownfundsinthelevel2implement-ingmeasures.

IntheareaofConvergence,IwouldliketohighlightthatwedeliveredtotheEuropeanInstitutionstheConvergenceRoadmapfor2010.ThisRoadmapoutlinedthespecificcommitmentsofCEIOPS’CommitteesandWorkingGroups.The2010ConvergenceReporthighlightsthatCEIOPSremainscommittedtothepromotionofsupervisoryconvergenceamongtheMemberStatesoftheEuropeanUnion.

Carlos Montalvo RebueltaCEIOPSSecretaryGeneralDGSFP,Spain

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CEIOPS OvERvIEW

3.2 Managing Board

TheManagingBoardisthebodywithresponsibilityforprogressingCEIOPS’businessbyimplementingtheresolutionspassedbyCEIOPS’Members.Itscompositionunder-went considerable change over the past year. CEIOPS’ Vice Chair Antoine Mantel(France)andManagingBoardmemberTonyHobman(UnitedKingdom)steppeddownfromtheirpositionsinspring2010astheypursuednewopportunitiesatnationallevel.

InJuly2010,CEIOPSMemberselectedDamianJaworski(KNF,Poland)andBillGalvin(TPR, United Kingdom) as new Managing Board members. On the same occasion,Joanne Kellermann (DNB, Netherlands) was elected as CEIOPS’ Vice-Chair. In June2010,MichelFlamee(CBFA,Belgium)wasappointedasCEIOPS’InternalAuditor.

In2010, theManagingBoardmetninetimesandconductedadditional telephoneconferencesinordertoco-ordinateCEIOPS’transitiontoEIOPA,discussregularworkaswellasaddressdemandsatshortnoticefromtheEUpoliticalinstitutions.

FromJuly2010,CEIOPSManagingBoardwascomprisedofthefollowingmembers:GabrielBernardino,Chair(ISP,Portugal);JoanneKellermann,Vice-Chair(DNB,Nether-lands);BillGalvin(TPR,UnitedKingdom);DamianJaworski(KNF,Poland);FlaviaMaz-zarella(ISVAP,Italy)andKaidoTropp(FSA,Estonia).RaffaeleCapuano(COVIP–Italy)hasbeeninvitedtoparticipateinManagingBoardmeetingsonmattersrelatedtotransitiontoEIOPAinhiscapacityastheChairofCEIOPS’ConvergenceCommittee.

3.1 Introduction

The Committee of European Insurance and Occupational Pensions Supervisors(CEIOPS)wasestablishedin2004asa‘Level3’Committeefollowingtheextensionofthesocalled‘Lamfalussyapproach’tothefieldofinsurance,reinsuranceandoccupa-tionalpensions.CEIOPScontinuedtoadvisetheEuropeanCommission,eitherattheCommission’srequestor itsowninitiative in theareasofpreparing implementingmeasures,issueguidelines,recommendationsandstandards.Thepermanentstruc-tureofCEIOPSwasrepresentedbyitsSecretariat,whichassistedtheManagingBoardandWorkingGroupsincarryingouttheirtasks.TheSecretariatalsoactedascoordi-natorinthedialoguewithmarketparticipantsandmaintainsrelationswiththeEu-ropeanCommissionandotherthirdparties.InadditiontoitssupervisoryprojectstheCEIOPSSecretariatwasheavilyinvolvedinpreparingthetransitiontotheEuropeanInsuranceandOccupationalPensionsAuthority(EIOPA),whichsucceededCEIOPSon1January2011.

Flavia Mazzarella(ISVAP,Italy)

Michel Flamee(CBFA,Belgium)

Raffaele Capuano(COVIP,Italy)

Gabriel BernardinoChair(ISP,Portugal)

Bill Galvin(TPR,UnitedKingdom)

Damian Jaworski(KNF,Poland)

Joanne KellermannVice-Chair(DNB,Netherlands)

Kaido Tropp(FSA,Estonia)

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3Frankfurt,26/27January2010

Approvalofconsumerprotectionsurveyoncomplaints

Approvalof2009convergencereportandofthe2010roadmap.

EndorsementofamandateforanOPCworkstreamonPRIPsandpensions.

Frankfurt,29/30March2010

EndorsementofCEIOPSAdviceforLevel2ImplementingMeasuresonSolvencyII:CalibrationoftheMCR;CalibrationoftheHealth-Under-writingRisk;CalibrationoftheNon-LifeUnderwritingRisk.

ApprovalofthedraftQIS5TechnicalStandards

EndorsementofCEIOPSAdviceforLevel2ImplementingMeasuresonSolvencyII:TechnicalCriteriaforAssessing3rdCountries.

ApprovaloftherevisedreportonthefunctioningofCollegesofSupervisors.

ApprovaloftheOPC’sdraftpaperonpracticalissuessurroundingcross-borderactivityofIORPsforsubmissiontotheEuropeanCommission.

ApprovaloftheOPCpolicyoptionspaperonPRIPsandpensionsforsubmissiontotheEuropeanCommission.

ApprovaloftheextensionoftheConsultativePanelmandateuntilEIOPAisinplace.

Tallinn,1/2July2010

Approvalofthe2010updatedreportondevelopmentsinthemarketforcross-borderIORPs.

ApprovaloftheanalysisonringfencingarrangementsinstresssituationsrelatedtoOccupationalPensions.

ApprovalofSolvencyIIreportsaddressingthelevelofpreparationofsupervisors.

ElectionofDamianJaworski(PL)andBillGalvin(UK)asmembersoftheManagingBoard.ElectionofJoanneKellermann(NL)asvice-chairoftheManagingBoard.

Frankfurt,9/10November2010

Approvalofthevariableannuitiesreportforpublicconsultation.

Approvalofthemethodologyonequivalenceassessment.

ApprovalofdraftAdvicetotheEuropeanCommissionontheInsuranceMediationDirective(IMD).

ApprovalofCEIOPS’responsetotheGreenPaperonpensions.

ApprovaloftheOPCreportonManagementOversightandInternalControlsapplicabletoIORPs.

Approvalofasummarynoteoncross-borderIORPs,toaccompanytheearlierpracticalissuespaper,forsubmissiontotheEuropeanCommission.

3.3 Members Meeting

The respective national supervisory authorities in the field of insurance and occu-pationalpensionsineachMemberStateoftheEuropeanUniondesignatedaseniorrepresentativetoparticipateinCEIOPSasMember.CEIOPS’MembersMeetingisitsmaindecision-makingbody.FourMembersMeetingswereheldover thereportingperiod.

Thekeydecisionstakenareoutlinedbelow:

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Association Members Country Proxies CountryMr.GérarddelaMartinièreChairman) FR –

CEA Corinti,Alberto IT –AMICE Bonnet,Yanick FR Pozniak,Gregor ATBIPAR Carty,Paul IE Hough,David UKAEIP Gabellieri,Bruno FR Borgdorff,Peter NLFEE Geib,Gerd DE Ellenbürger,Frank DEGCAE Creedon,Seamus UK Goossens,Karel BEEFRP Ray,Martin UK Peaple,Nigel UKAMICE Kalpala,Asmo FI Paakkanen,Markku FIETUC Lourdelle,Henri FR Klec,Gerald ATEFRP Maassen,Jaap NL Verhaegen,Chris BEBEUC McAteer,Mick UK Fily,Anne FRCROForum Plas,Patricia BE Lempertseder,Robert DE

Seganti,Federica IT –

BusinessEurope Stephens,Jim UK –

CEA Wehling,Axel DE Gladysz,Andrej PL

Working Groups

Consultative PanelSecretariat:SimonaDascálu,

Romania

Managing BoardChair:GabrielBernardino,

PortugalSecretariat:PatrickHoedjes,

TheNetherlands

Members’ MeetingSecretariat:PatrickHoedjes,

TheNetherlands

SecretariatSecretaryGeneral:CarlosMontalvoRebuelta,Spain

Financial Requirements Expert Group (FinReq)Chair:OlafErmert,Germany

Secretariat:PamelaSchuermans,Belgium

Financial Stability Committee (FSC)Chair:PatrickDarlap,Austria(frommid2010)

Chair:KajalVandenput,Belgium(untilmid2010)Secretariat:SandraDesson,TheNetherlands

Occupational Pensions Committee (OPC)Chair:BrendanKennedy,Ireland

Secretariat:TeresaTurner,UnitedKingdom

Committee on Consumer Protection (CCP)Chair:VictorRod,Luxembourg

Secretariat:DavidCowan,UnitedKingdom

Convergence Committee (ConCo)Chair:RaffaeleCapuano,Italy

Secretariat:GiuliaConforti,Spain

Internal Governance, Supervisory Review and Reporting Expert Group (IGSRR)

Chair:JanParner,DenmarkSecretariat:IwonaKrasniewska,Poland

Internal Models Expert Group (IntMod) Chair:PaoloCadoni,UnitedKingdom

Secretariat:JuanLumbreras,Spain

Insurance Groups Supervision Committee (IGSC)Chair:PetraFaber-Graw,GermanySecretariat:PerrineKaltwasser,France

Solvency II

Review PanelChair:MichelFlamée,BelgiumSecretariat:DoraItcheva,Bulgaria

3.5 Permanent Committees and Expert Groups

ToexecuteCEIOPS’ambitiousworkprogramme theCommitteemaintained itsop-erationalstructureunderwhichWorkingGroups,ExpertGroupsandTaskForceswereworkingonaspecificsetofgoals,tasksandresponsibilities.

In2010,CEIOPScontinuedtocoordinateeightWorkingGroups,fourofwhichdealtwith Solvency II-related issues. Four of these eightWorking Groups were so calledPermanentCommittees,whoworkedonareasagreedbyCEIOPSMembers.TheotherfourWorkingGroupswereso-calledExpertGroupsthatwereusuallyinchargeofataskunderaspecificmandateandareusuallydisbandedonceitstasksareaccom-plished.Respectively,theChairofCEIOPSConvergenceCommittee(ConCo),RaffaeleCapuano,informedCEIOPSMembersinDecember2010thattheConCoCommitteehadcompleteditsmandateandsuggestedtoclosedownthecommittee.

3.4 Consultative Panel

CEIOPS’ConsultativePanelplaysanessential role inensuring theCommittee’sac-countabilityandtransparency,andisavaluablesourceofimpartialcomment,adviceandguidanceonCEIOPS’policy-makingprocess.

In2010,theConsultativePanelcontinuedtoprovideCEIOPSandtheEUpoliticalin-stitutionswithvaluableandtimelyinputintothetwolargesttopicsofdebate,name-ly: the reform of European financial supervision including transition to EIOPA andtheSolvencyIIdirectiveincludingQIS5,whichwasthelargestprojectundertakenbyCEIOPSin2010.

ThecompositionofthecurrentConsultativePanelwasapprovedbyCEIOPSMembersinMarch2008foratermoftwoyears.InpreparationforthetransitiontothenewEuropeanInsuranceandOccupationalPensionsAuthority(EIOPA),CEIOPSMembersdecidedintheirMarchMeetingtoextendtheexistingmandateuntiltheformales-tablishmentofthenewAuthority.

InApril2010,Mrs.KristieKaneparoresignedfromtheConsultativePanelandwasre-placedbyherproxyMr.AlbertoCorinti.BothMrs.KaneparoaswellasMr.CorintiwerenomineesendorsedbytheEuropeanInsuranceandReinsuranceFederation,CEA.

AttheendofDecember2010,thecompositionoftheConsultativePanel,chairedbyMr.GérarddelaMartinière,wasasfollows:

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3.6 CEIOPS Secretariat

AtthecentreoftheorganisationalstructureofCEIOPSwasitsSecretariat.TheSecre-tariatprovidedsupportandinformationtoCEIOPS’MembersandassiststheManag-ingBoardandtheWorkingGroupswiththeirduties.TheSecretariat’sexpertsalsocoordinatedreportsandcommunications,dialogueswithmarketparticipants,con-sumersandrespondedtorequestsfromtheEuropeanCommissionandparticipatedinexpertgroupsontheEuropeanlevel.

InpreparationforthetransitiontoEIOPA,theCEIOPSSecretariatgrewfrom16teammembersattheendof2009to28by31December2010.

Teamof31December2010

Management: Carlos Montalvo Rebuelta (Secretary General, DGSFP, Spain), PatrickHoedjes (Deputy Secretary General, DNB, Netherlands, replacing Gerlinde Taurer,FMA,Austria,whowasDeputySecretaryGeneraluntil31March2010).

Team: GiuliaConforti(Spain),CatherineCoucke(Belgium),DavidCowan(FSA,UnitedKingdom), Simona Dascalu (Romania), Sandra Desson (DNB, Netherlands), FatimaDiagoVillescas (Spain), Gerd Fassauer (Germany), Sylvia Geiger (Germany), Dora Il-tcheva(Bulgaria),PerrineKaltwasser(ACP,France),CristinaKluge(Germany),StefanKnapp(Germany),DeborahKrapf(UnitedKingdom),IwonaKrasniewska(Poland),JarlKure(Finanstilsynet,Denmark),TanjaLeimbach(Germany),LayPengLim(FSA,UnitedKingdom) Juan Lumbreras (DGSFP, Spain), Kerstin Maier (Germany), Sophia Milili-Makrydakis (Greece), Daniel Perez (DGSFP, Spain), Sybille Reitz (Germany),TilmannRoth(Germany),PamelaSchuermans(Belgium),TeresaTurner(TPR,UnitedKingdom),Pierre-JeanVouette(ACP,France).Patrick Hoedjes

(DeputySecretaryGeneral,DNB,Netherlands)

NEW

NEWNEW

Kerstin Maier(Germany)

Juan Lumbreras(DGSFP,Spain)

Stefan Knapp(Germany)

Sybille Reitz(Germany)

David Cowan(FSA,UnitedKingdom)

Catherine Coucke(Belgium)

Jarl Kure(Finanstilsynet,Denmark)

Simona Dascálu(Romania)

Sandra Desson(DNB,TheNetherlands)

Perrine Kaltwasser(ACP,France)

Pamela Schuermans(Belgium)

Carlos Montalvo Rebuelta(SecretaryGeneral,DGSFP,Spain)

Teresa Turner(ThePensionsRegulator,UnitedKingdom)

Giulia Conforti(Spain)

Tilmann Roth(Germany)

Gerd Fassauer(Germany)

Tanja Leimbach(Germany)

Deborah Krapf(UnitedKingdom)

Pierre-Jean Vouette(ACP,France)

Sophia Milili-Makrydakis(Greece)

Daniel Ortiz Perez(DGSFP,Spain)

Sylvia Geiger-Cludts(Germany)

Iwona Krasniewska(Poland)

Fatima Diago Villescas(Spain)

Dora Iltcheva(Bulgaria)

Lay Peng Lim(FSA,UnitedKingdom)

Cristina Kluge(Germany)

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3.7 CEIOPS and the Political Institutions

3.7.1CEIOPScontributiontothereformoftheEUfinancialsupervisoryarchitectureUnsurprisingly, the reform of the EU financial supervisory architecture has beenat theforefrontofCEIOPS’activitiesduring2010,not leastbecauseCEIOPSwas inchargeoftherotationalco-ordinationof3L3activitiesfrom1July2010until31De-cember2010.Together with theother LamfalussyLevel 3Committees –CESRandCEBS–CEIOPSactivelyfollowedandco-ordinated,wherenecessary,developmentsinrelationtotheproposalssettingupthenewEuropeanSupervisoryAuthorities(ESAs).

Inthisrespect,theLevel3ChairsandtheirrespectiveSecretaryGeneralsandSecre-tariatsregularlyconvenedconferencecalls,exchangedbriefingsandmetonseveraloccasions in advance of meetings with the EU political institutions. Several meet-ingswereheldduring2010withEuropeanCommissionerforInternalMarketsandServices,MichelBarnier,theChairwomanoftheEuropeanParliament’sEconomicandMonetaryAffairsCommittee,SharonBowlesandthePresidentoftheEuropeanCen-tralBank,Jean-ClaudeTrichet.

TheLevel3Committeesalsoprovidedinputintothepoliticalprocessbysubmittingon18June2010adetailedpapertotheEUpoliticalinstitutionsinvolvedinthetri-loguediscussionsoutliningtheirspecificconcernsonthebasicquestionsoftheclearassignmentofresponsibilitiestotheESAs,theiraccountabilityandtheirindepend-ence.

CEIOPSalsoworkedintensivelywithitssistercommitteesoverthepastyearinpre-paringfor thetransitiontotheESAs.Thishas involvedregularcommunicationbe-tweenthethreeCommitteesoveravarietyoftopicssuchasinternalgovernanceoftheESAs,enhancedco-operationwiththeEuropeanSystemicRiskBoard(ESRB),crisismanagementpowers,humanresourcesandbudgetaryissuesandtherulesofproce-dureoftheso-calledJointCommitteeoftheESAs.

3.7.2CEIOPSandtheCounciloftheEuropeanUnionThroughout2010,CEIOPSregularlyattendedthemeetingsoftheFinancialServicesCommittee(FSC)andwasinvitedtoattendmostmeetingsoftheEconomicFinancialCommittee(EFC)inordertodiscussissuessuchasfinancialmarketdevelopments,crisismanagement(e.g.stresstesting)andinternationalregulatorydialogue.

TogetherwiththeotherLevel3Committees,CEIOPSsubmittedtotheEFC-FinancialStabilityTableof20/21September2010asectoralriskreport togetherwitha3L3cross-sectoralriskscovernoteandanupdatereporton3L3Members’experienceofnonco-operativejurisdictionswithintheirregulatory/supervisorycompetencies

3.7.3CEIOPSandtheEuropeanCommission2010wasayearofverycloseco-operationandco-ordinationofeffortswiththeEu-ropeanCommission,particularlyonLevel2adviceonimplementingmeasuresunderSolvencyII,includingrunningthefifthQuantitativeImpactStudy(QIS5)betweenJulyandNovember2010.Therewasalsoextensivereportingonfinancialstabilitymat-tersandconsumerprotectionissuesintheinsuranceandoccupationalpensionssec-tors,aswellasspecificreportingonissuesaffectingoccupationalpensionsintheEU.

3.7.4CEIOPSandothersAsinpreviousyears,in2010,CEIOPS’Chair,ManagingBoard,WorkingGroupChairs,SecretariatandMemberdelegates,continuedtorepresentCEIOPSatvariouseventsinEuropeandinternationally.ThisinvolvedspeechesandpresentationatofficialEUpublic hearings, various industry conferences, seminars and receptions, as well asdialogueswiththirdcountrycounterparties.ThedemandforCEIOPS’contributiontotheseeventshascontinuedtogrowsincelastyear.

EIOPCEuropean Insurance

and OccupationalPensions Committee

EBCEuropean Banking

Committee

FFCEuropean Financial

ConglomeratesCommittee

ESCEuropean Securities

Committee

CEIOPSCommittee of

European Insuranceand Occupational

Pensions Supervisors

CEBSCommittee of

European BankingSupervisors

CESRCommittee of

European SecuritiesRegulators

Regulators “Level 2” Committees

Regulators “Level 3” Committees

“3L3”Fi

nanc

ial S

ervi

ces

Economic & Financial

Com

mitt

ee

Committee

Council W

orking Groups Parliament Com

mitt

ees

Co

uncil

of Ministers European Parliam

ent

(E

COFIN)

EuropeanCommission

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4 EIOPA is commissioned to monitor and identify trends, potential risks and vulner-abilitiesstemmingfromthemicro-prudentiallevel,acrossbordersandacrosssectors.

Toachieveitsambitiousgoals,EIOPAwasestablishedasanAuthoritywithownlegalpersonalityaswellasadministrativeandfinancialautonomy.EIOPAisanindepend-entadvisorybodytotheEuropeanParliamentandtheCounciloftheEuropeanUnion;itsChairpersonandExecutiveDirectorare independentexecutives.Underthenewumbrella,EIOPAcandevelopdraftregulatoryand implementingtechnicalstandardsandissueguidelinesandrecommendationsontheapplicationofEUlaw;itcanrequirenational supervisory authorities to take specific actions to remedy an emergencysituationandsettledisagreementsincross-bordersituationsbetweenauthorities.

Toaccountforthespecificconditionsinnationalmarketsandthenatureoffinancialinstitutions,theEuropeanSystemofFinancialSupervisorsisanintegratednetworkofnationalandEuropeansupervisoryauthorities thatprovidesthenecessary linksbetweenthemacro-andmicro-prudential levels, leavingday-to-daysupervisiontothenationallevel.EIOPAisgovernedbyitsBoardofSupervisors,whichintegratestherelevantnationalauthoritiesinthefieldofinsuranceandoccupationalpensionsineachMemberState.ItisfurtherdirectedbyitsManagementBoard,whichcomprisessixmembersoftheBoardofSupervisorsandEIOPA’sChairperson.

DuetoitsstatusasanagencyoftheEuropeanUnion,EIOPAwillfurtherenhanceitsorganisationandinfrastructuretorespondtoincreaseddemandsfortransparency,accountabilityandpolicywork.Measuresincludestaffdevelopment,investmentintechnology,furtherimprovementtothefunctionalityofthewebsiteandevaluatingthecreationofdatabasesanddocumentservices.

EIOPA’s tasks and responsibilities are defined in the Regulation 1094/2010ofNovember2010.

ThisisthelastannualreportpresentedbytheCommitteeofEuropeanInsuranceandOccupational Pensions Supervisors. On 1 January 2011, CEIOPS was replaced by theEuropeanInsuranceandOccupationalPensionsAuthority.EIOPAwasestablishedinconsequenceofthereformstothestructureofsupervisionofthefinancialsectorintheEuropeanUnion.EIOPAispartoftheEuropeanSystemofFinancialSupervisorsthatcomprises threeEuropeanSupervisoryAuthorities,onefor thebankingsector(EBA), one for the securities markets sector (ESMA) and one for the insurance andoccupationalpensionssector (EIOPA),aswellas theEuropeanSystemicRiskBoard(ESRB)andthenationalsupervisoryauthorities.

WhileEIOPAwillcontinuetobeconcernedwithsupportingthestabilityofthefinan-cialsystemaswellastransparencyofmarketsandfinancialproducts,theAuthoritywillhaveenhancedtasks,powersandstructures.Inthemeantime,allexistingCEIOPStasksandcompetencieswillbetransferredtoEIOPA,andongoingworkandprojectswillbecontinued.Toachievetheobjectivesasdefinedintheregulation,EIOPA’smaingoalscanbesummarizedasfollows:●Betterprotectingconsumerssuchaspolicyholders,pensionschememembersand

beneficiaries.●Improvingthefunctioningoftheinternalmarketaswellasensuringtheintegrity,

transparency,efficiencyandorderlyfunctioningoffinancialmarkets.●Ensuringahigh,effectiveandconsistentlevelofregulationandsupervisiontaking

accountofthevaryinginterestsofallMemberStatesandthedifferentnatureoffinancialinstitutions.

●Greaterharmonisationandcoherentapplicationofrulesforfinancialinstitutions&marketsacrosstheEuropeanUnion.

●Ensuringthattakingonriskrelatedtoinsurance,reinsuranceandoccupationalpensionsactivitiesisappropriatelyregulatedandsupervised.

●Strengtheningoversightofcross-bordergroups.●PromotingcoordinatedEuropeanUnionsupervisoryresponse.

EIOPA – ThE nEW AuThORITy

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5.2 Public Consultations

SomeoftheCEIOPSactivitieswithintheareaofpublicconsultationwereinitiatedin2009andcontinuedin2010.ThenewconsultationactivitiesthatCEIOPSstartedthroughout2010wererelatedtoSolvencyII.

InJanuary,CEIOPSissuedtwomoresetsofLevel2adviceonimplementingmeasuresunderSolvencyII,aswellasacomprehensivebackgrounddocumentonthecalibra-tionofthestandardformula.Inthesamemonth,aconsultationpaperwasissuedonthepre-applicationprocessforinternalmodelsfollowedbyareportincludingfinalguidanceinMarch.InJuly,CEIOPSissuedaconsultationpaperonequivalenceassess-mentinrelationtoarticles172,227and260oftheSolvencyIIDirective,followedbytheAdvicetotheEuropeanCommissionendofAugust.InSeptember,theconsulta-tion paper about the methodology for equivalence assessments under Solvency IIwasissuedfollowedbyafinaldocumentinNovember2010.Wherenecessary,CEIOPShasalso initiated informalpre-consultationswithselectedstakeholders, to informthemaboutongoingworkonSolvencyII;thepre-consultationswillbefollowedbypublicconsultations.

5.1 Introduction

TransparencyandaccountabilityareimportantfeaturesforCEIOPSandbothmeas-uresarestronglyaligned.TransparencyandaccountabilitysupportCEIOPS’commit-menttoachievetheoverallgoalsofstrengtheningthefinancialsystembyharmoniz-ingmarketsandapplyingacommonrulebook.AchievingthesegoalswillultimatelyservethecitizensoftheEuropeanUnion.

CEIOPS’accountability isensured throughdifferent tools.Oneof themain instru-ments for CEIOPS is peer reviews, conducted by the CEIOPS Review Panel that ismandatedtohelpmonitoringtheimplementationofsupervisoryprovisionsandtomonitorconvergenceinsupervisorypractices(seechapter10).Additionally,CEIOPSsupportedtheConsultativePanel,whichisavaluablesourceofcomment,adviceandguidanceonCEIOPS’policymakingprocess(seechapter3.4).Thisstrongtoolissup-portedbypublicconsultationsthatareconductedtoensureimplementationoftheviewsandconcernsofallstakeholders.

InadditiontotheConsultativePanelandpublicconsultations,CEIOPS’annualcon-ferenceprovidestheopportunityforexchangeofopinionwithvariousstakeholders(seechapter12.4).Anessentialtooltoaccesstheextensivescopeofinformationisthewebsitethathasbeencompletelyoverhauledandwasre-launchedattheendof2010.

ACCOunTAbILITy, TRAnSPAREnCy And COnSuLTATIOn

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InSuRAnCE

6.1 Introduction

CEIOPS’workoninsurancewasinfluencedtoaverylargeextentbytheSolvencyIIproject.Nevertheless,variousotherimportantareasofworkrelatingtotheinsurancesectorareunderwayandhaveprogressedin2010.Inthisrespect,CEIOPS’adviceontherevisionoftheInsuranceMediationDirectiveaswellasitsrecommendationsontheCommission’sWhitePaperonInsuranceGuaran-teeSchemesshouldbehighlighted1.CEIOPShasalsobeeninvolvedinthediscussiononthelegalframeworkforPackagedRetail InvestmentProducts (PRIPs)onasectoralandcross-sectoralbasis,onwhichmoredetailscanbefoundinthefinalreport2.Finally,theworkoninsurancegroupsupervision also carries forward the initiatives on harmonising group supervision,whichstartedwellbeforetheinceptionoftheSolvencyIIproject.

6.2 Solvency II Overview

Sincethefirstdiscussionsinearly2000,SolvencyIIhasgrowntobecomeoneofthemostambitiouslegislativeprojectscurrentlyintheEuropeanUnionandoneofthecoreareasofworkforCEIOPSsinceitscreation.In2010,CEIOPSdelivereditsfinalsetofadvicetotheEuropeanCommissiononhowtoimplementtheSolvencyIIDirec-tive,followingthreeearliersetsofadviceinthecourseof2009and2010,covering

over50areasforimplementingmeasures.Astheimplementationdeadlineof31De-cember 2012 approaches, the discussions on the details of the measures that willregulatesupervisoryreviewandtheriskmanagementofundertakingshavebecomemoreintenseandreacheditspeakin2010.

Heateddiscussionshave takenplace in thecourseof2010on issuesconsideredofimportance by undertakings and supervisors.The exchange of views and coopera-tionwiththeindustryinmanysensitiveareashastakenplaceinvarioustaskforces,aimingatpragmaticandsensiblesolutions,togetherwiththeEuropeanCommission.The following task forceswerecreated:TaskForceon the IlliquidityPremium, JointWorkingGrouponNon-LifeCalibration,HealthTaskForce,CatastropheScenariosTaskForce.Inaddition,ajointproposalforthecalculationofprofitsarisingoffuturepremi-umsforQIS5waselaborated.Thesejoinedeffortshaveproventobeefficientinreach-ingconclusions,butalsoinincreasingtheunderstandingbetweenundertakingsandsupervisors.Thisvaluabledialoguewillbecontinued,alsobeyondtheentryintoforceofSolvencyII.

ThepreparationandexecutionofthefifthQuantitativeImpactStudy(QIS5)in2010markedthemomenttotesttheproposalselaboratedbyCEIOPS,theEuropeanCom-missionandindustryonaEuropean-widelevel[seechapter6.2.6].TheresultsofQIS5

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willallowtheEuropeanCommissiontotakeinformeddecisionsonthedetailsoftheregulation.TheexercisewillalsohelpsupervisorstodetectwhereincreasedeffortsneedtobemadebeforeSolvencyIIbecomesoperational.

ThetransitiontoEIOPAinJanuary2011playsanimportantroleinrealisingthepo-tentialforconvergentapplicationofSolvencyII.EIOPAhasthetasktodraftbindingtechnicalstandardsfortheimplementationofSolvencyIIandwillplayanimportantroleinthereviewoftheimplementationoftheregulationbyMemberStates.WhereSolvencyIIputsthebasisfortheeffortsoftheEuropeansupervisorycommunitytoimprovegroup-widesupervisionof(re)insuranceundertakings,EIOPAwillbeabletofurtherstimulatethisbyassistingsupervisorsintheappointmentofthegroupsu-pervisor, or by acting as a mediator in cross-border disputes between supervisors.FacingthechallengeofSolvencyII,thenewAuthorityaimstobeaunifyingandsta-bilisingfactor.

FactsaboutSolvencyII●Newregulatoryframeworkprovidingsupervisorswiththeappropriatetoolstoas-

sesstheoverallsolvencyofinsuranceandreinsuranceundertakingsthroughquan-titativeandqualitativemeasuresthatinfluencetheunderstandingandtheman-agementoftherisksoftheundertakings.

●Basedonthreepillars:quantitativerequirements(PillarI),governance,riskmanage-mentandsupervisoryreview(PillarII)aswellassupervisoryreportingandpublicdisclosure(PillarIII).

●Level1FrameworkDirectivepublishedon17December2009.●Level2implementingmeasuresunderdiscussionwithEuropeanCommissionand

MemberStatessinceend2009.●Level3non-bindingguidelinestoensuretheconvergentapplicationoftheregula-

tiontobeissuedbyCEIOPS.●Level3bindingimplementingtechnicalstandardstobedraftedbyCEIOPSanden-

dorsedbytheEuropeanCommission.●EntryintoforceofSolvencyII:1January2013

6.2.1StandardFormulaCapitalRequirements2010hasbeencrucialforthetranslationoftheSolvencyIIadviceonPillar1issuesintothetechnicalspecificationsforthefifthQuantitativeImpactStudy(QIS5),whichincludednewsimplifications,rulesontheclassificationandeligibilityofownfunds,standardisedcatastrophescenariosfornon-lifeandhealthunderwritingrisk,anewmethodologytodeterminetheinterest ratecurvefordiscountingtechnicalprovi-sionsandalsorevisedcalibrationandcorrelationparametersfor theSCRstandardformula.

CEIOPSpublishedinApril2010,togetherwithitsfinaladviceforLevel2implement-ingmeasuresonthecalibrationoftheminimumcapitalrequirementandofunder-writingrisksinnon-lifeandhealthinsurance,anexhaustivecalibrationpaperwhich

isthemainsupportingdocumentforitsadvice.Thecalibrationpaperprovidesback-ground information and compiles all the technical analysis carried out by CEIOPSincalibratingtheSolvencyCapitalRequirement (SCR)standardformula,aswellaskeyparametersforthecalculationoftheTechnicalProvisions.OnekeyareainwhichCEIOPS undertook further work was the calibration of the non-life underwritingrisk module, where CEIOPS launched a European-wide data request in September2010andsetupaJointWorkingGrouptodiscussthemostappropriatecalibrationmethodologies togetherwith representatives from the industryand theEuropeanCommission.TheresultsofthisexercisewillfeedintotherecommendationsfortheEuropeanCommission’simplementingmeasuresinMarch2011.

AjointTaskForcecomposedofCEIOPSMembersandindustryrepresentativesprovidedthe European Commission with input and guidance on the calibration and appli-cationofnon-lifeandhealthcatastrophestandardisedscenarios.TakingintoaccounttheQIS5results,CEIOPSsuccessorEIOPAwiththesupportoftheindustrywillaimtorefineitsrecommendationstotheEuropeanCommissioninMarch2011.

6.2.2TechnicalProvisionsIn 2010, CEIOPS provided important advice on a key assumption underlying thecalculationoftechnicalprovisions:theinterestratecurvetobeusedfordiscounting.CEIOPSprovided theEuropeanCommissionwith technicalbackgroundon the riskfree interest rate term structure. Furthermore, CEIOPS published the report of theTaskForceontheliquiditypremium,whichwasdevelopedincooperationwithCEIOPSMembers, industry and academia representatives, and the European Commissionasanobserver.Thisreportcontainedconclusionsontheprinciplestobeappliedincaseoftheinclusionofanilliquiditypremiuminthevaluationofinsuranceliabilitiesandontheprinciplestobeappliedintheextrapolationoftheinterestratecurvefordiscountinginsurancecompanies’long-termliabilitiesbeyondthelastavailabledatapointofsufficientliquidity.

ConsequentlytheEuropeanCommissionhastestedacompletelynewriskfreeinter-estratetermstructureinQIS5comparedtoQIS4,withtheinclusionofanilliquiditypremiumandanewextrapolationmethod,aswellasnewbasicriskfreerate(ad-justedswaprateinsteadofgovernmentbonds)toderivethepointsofthecurveaswasprovidedbytheindustry.

In2010,CEIOPSalsostarteddevelopingEuropeanactuarialguidelines for thepurposeofensuringaconvergentimplementationofSolvencyIIandaharmonisedperformanceoftheactuarialfunctionforthevaluationoftechnicalprovisions.Theseguidelines are being developed in close cooperation with the European actuarialprofession,inparticularwithGroupConsultatif.

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6.2.3ValuationofAssetsandLiabilities(excl.TechnicalProvisions)FollowingCEIOPS’adviceonLevel2implementingmeasureswithrespecttothevaluationofassetsandliabilitiesotherthantechnicalprovisionsandtheworkoftheEuropeanCommissiononadraftLevel2regulation,CEIOPShasconsideredtheimpactandstartedworkingonLevel3guidelinesinthisarea.

6.2.4OwnFundsWithregardtoownfunds,CEIOPSfocusedin2010onclarifyingthecriteriafortheclassificationofownfunds,aswellastheapprovalprocessesforancillaryownfunds.Furtherworkwascarriedoutintheareaofthetreatmentofparticipationsandring-fencedfunds.TheseareasarealsobeingaddressedintheQIS5exercise,whichshouldshedfurtherlightontheremainingproblems.Theexperiencegatheredinthesear-easwillfeedintothedevelopmentofguidelinesorbindingtechnicalstandards,keep-inginmindCEIOPSclearintentiontosafeguardthequalityoftheownfundsinlightof their loss absorbing capacity. Furthermore, in view of the QIS5 exercise, CEIOPScontributedtotheelaborationofsuggestionsfortestinggrandfatheringproposalstosmoothenthetransitiontoSolvencyII.

6.2.5InternalModelsInorder to increasesupervisoryconvergenceandprepare industryandsupervisorsfortheuseofinternalmodelsasanalternativetothestandardformulaunderSol-vencyII,CEIOPShasprovidedsupervisorswithaplatformfortheexchangeofinfor-mationandknowledgeinthisarea.

Intheworkprogrammefor2010CEIOPScommittedtoissueadvicetotheEuropeanCommissiononthetreatmentofpartialinternalmodels.ThisadvicewaspublishedinJanuary2010,andprovideddetailsonhowtheresultsofpartialinternalmodelsmaybeintegratedintothestandardformularesultsforthecalculationoftheSolven-cyCapitalRequirements(SCR).Tofollow-uponthis,CEIOPSsetupataskforcewithitsmainstakeholderswiththegoaltodraftLevel3Guidelinesonthistopic.

CEIOPS’workrelatedtointernalmodelsalsoinvolvedpreparingthedrafttechnicalspecificationsforthefifthQuantitativeImpactStudy(QIS5).

Consultations with stakeholders have provided valuable information to CEIOPS tocarryoutitsworkoninternalmodels.Thisincludedpresentationsbyinsurancecom-panies,consultantsanddesignersofvendormodels.CEIOPShasstartedtoprepareLevel3guidelinesunderSolvencyIIontheapprovalofinternalmodelsaswellastestsandstandardsforinternalmodels.ForsomeprioritizedLevel3guidelines,inpartic-ularontheusetest,statisticalqualitystandards,calibrationapproximations,profitandlossattributionandvalidation,CEIOPSwillconductaninformalpre-consultationattheendof2010andbeginningof2011.

Paolo CadoniIntModChairFSA,UnitedKingdom

Olaf ErmertFinReqChair

BaFin,Germany

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Furthermore,CEIOPSisimprovingtheexpertiseandconvergenceofsupervisoryprac-ticesintheareaofinternalmodels:●Inthefirsthalfof2010CEIOPSpublishedLevel3guidanceonthepre-application

process, which followedCEIOPSfinaladvice to theEuropeanCommission on theinternalmodelapprovalprocess.

●Aspartofthepre-applicationwork-stream,CEIOPShasstartedimplementingini-tiatives to enhance supervisory consistency in the pre-application process acrossEuropeandtoensureadequateco-operationamongsupervisorsintheapprovalofinternal models. In this respect CEIOPS is organizing informal practical meetingsamongsupervisorscurrentlyinvolvedinthepre-applicationprocess.

●CEIOPScontinueditspre-visitsprogrammeduringthefirsthalfof2010todevelopabetterunderstandingaboutcurrentinternalmodelingpracticescurrentlyappliedbyinsurancecompanies.

●CEIOPSalsoprovidedsupporttothedevelopmentoftrainingprogrammesforSol-vencyII,inparticulara3L3seminaron“InternalModelsintheBankingandInsur-anceSectors”inJuneandasectoralseminaronInternalModelsApprovalinOctober(seechapter12.6).

6.2.6FifthQuantitativeImpactStudyThedevelopmentofSolvencyIIregulationisaccompaniedbyregularso-calledQuantitativeImpactStudies(QIS).Theresultsofthefourthstudy(QIS4)werepub-lishedinNovember2008.AfifthQuantitativeImpactStudy(QIS5)hasbeencarriedoutin2010.

BasedonitsfinaladviceforLevel2implementingmeasures,CEIOPSfinalisedthedrafttechnicalspecificationinMarchandtheEuropeanCommissionpublishedthefinalspecificationsinJulyfollowingfurtherconsultationwithMembersStatesandthemainstakeholders.

ThefirstobjectiveofQIS5istoprovideallstakeholderswithdetailedinformationonthequantitative impactoninsurers’andreinsurers’solvencybalancesheets linkedtotheintroductionofthefutureLevel2 implementingmeasuresunderSolvencyIIcomparedtothesituationunderSolvencyI.QIS5alsoallowscheckingthealignmentofthetechnicalspecificationswiththeprinciplesandcalibrationtargetssetoutintheSolvencyIIDirective.

AnotherimportantaimofQIS5wastofosterthepreparationbyinsurers,reinsurersandsupervisorsfortheintroductionofSolvencyIIandtoidentifyareaswheretheirinternalprocesses,proceduresandinfrastructuremayneedtobeenhanced.QIS5wasalsoamilestoneinthedialoguebetweensupervisors,insurersandreinsurerswhilepreparingforthenewsupervisorysystem.

Almost70%oftheundertakingsthatwillbesubjecttoSolvencyIIhaveparticipatedintheexercise,andamanifestincreaseintheparticipationofinsurancegroupshasbeenachieved.

Tofacilitatetheparticipation,CEIOPSpublishedacommontemplateinAugust2010forparticipantstousetoreporttheirresults.ThistemplatewasalsoprovidedforanextensiveQuestion&AnswersprocedureatEuropeanlevelinco-operationwiththeEuropeanCommission–220questionsandanswerswerepublishedonCEIOPS’website.

ThankstothecommitmentofthestakeholdersandnationalsupervisorsduringtheQIS5exercise,Level2implementingmeasureswillberefinedtoensurethatSolvencyIIfinancial requirementsareeffectiveandadequatelydesignedandcalibrated.ThefinalresultsofthestudywillbepublishedinMarch2011.

Jan ParnerIGSRRChair

FSA,Denmark

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6.2.7InsuranceGroupsConsiderableeffortsandresourceshavebeendevotedbyCEIOPS’Members to thesupervisionofinsurancegroups.

CEIOPS’workinrelationto insurancegroupsunderthecurrentregime(SolvencyI)includes initiatives toharmoniseandstreamlinegroupsupervision fornationalaswell as for cross-border groups, and to enhance co-operation between supervisorswithintheCollegesofSupervisors(previouslyknownasCoordinationCommittees).In2010,98 insurancegroupswereinvolvedincross-borderactivitiesthroughtheirsubsidiaries.

In2010,CEIOPSworkrelatedtoinsurancegroupsupervisionwithrespecttoSolvencyIIinvolvedthepreparationoftechnicalspecificationsforQIS5.

CEIOPSiskeentoensuretheproperrecognitionofgroupspecificitieswhereneces-sary.Therefore,CEIOPSLevel3guidelinesonthepre-applicationofinternalmodelsgivesignificantroomforthecooperationwithintheCollegesofSupervisors.Specificgroupexpertisewasalsoappliedindevelopingtheworkonequivalenceandreporting.

Equivalenceassessments,eitherbytheEuropeanCommissionorgroupsupervisors,will play an important role in the supervision of the assessment of the solvency

positionofgroupsundertheSolvencyIIDirective.Thisisalsolinkedtotheincreas-inginvolvementofnon-EEAsupervisorsintheCollegesofSupervisorsofEuropeangroups,whereaholisticviewofthegroupisneeded.

Commonreportingbothatsoloandgrouplevelwillfacilitatethedialogueandex-changeofinformationbetweenthedifferentsupervisorsthatareinvolvedinthesu-pervisionofinsurancegroupsrespectively.

InMarch2010,CEIOPSpublisheditsreportonthefunctioningofCollegesofSuper-visorscovering theperiod2008–mid2009.Thereportprovidesdetailedstatisticson 53 of the most active Supervisory Colleges including those established for thelargestgroups.InNovember2010,CEIOPSreleaseditsReportonFunctioningofCol-legescoveringtheperiod2009–mid2010,whichrevealedthatthemainstrengthsofCollegesarethecooperationandcontactbetweenauthorities,theestablishmentofacomprehensiveviewofthegroupandthehigh-qualitydiscussionsbetweentheAuthorities.Furthermore,CEIOPShasfoundthatalltherespondentsparticipatinginthesurveyfollowtheHelsinkiProtocolandthatCollegesaregenerallyperformingtheirtasksaccordingtotheCEIOPSguidelines.

Theoutcomeofthosetwosurveysshowedthehighdedicationofsupervisorsinsu-pervisingcross-bordergroupswhileacknowledgingroomforfurtherimprovement.

This iswhyCEIOPSmonitored in2010 thefunctioningofCollegesonanon-goingbasis,focusingonspecifictargetssuchasthecreationofjointworkplansforCollegestoimprovesynergiesinCollegesworkandsettingupemergencyplansforColleges.BothtargetsarelikelytobemandatoryrequirementsundertheupcomingSolvencyIIregime.Thesecondtargetisalsoafollow-upofthepublicationofCEIOPS’“Guide-linesonpreparationforandmanagementofafinancialcrisis”inMarch2009.Thosetargets have been particularly monitored on the largest groups and prove to be asuccess.

Finally,indevelopingitsworkoninsurancegroups,CEIOPStakesintoaccountinter-nationaldevelopmentsinthisarea.

Petra Faber-GrawIGSCChair

Bafin,Germany

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6.2.8EquivalenceEndNovember2009,CEIOPSstartedpubliclyconsultingonitsdraftadviceonLevel2implementingmeasureswithrespecttothetechnicalcriteriathatshouldbeappliedwhen assessing third country equivalence under Articles 172, 227 and 260 of theSolvencyIIDirective,i.e.relatedtoreinsurancesupervision,inclusionofrelatedthirdcountry insurance and reinsurance undertakings in the group solvency calculationandgroupsupervision.

Aspartofthatconsultation,CEIOPSheldastakeholdermeetingon7January2010todiscussthedraftadviceandissuesrelatedtothirdcountryequivalencewithmajorstakeholdersfromtheEuropeanUnionaswellasrepresentativesfromthirdcoun-tries.ThepublicconsultationperiodendedatthebeginningofFebruary2010,afterwhichCEIOPSdelivered itsfinaladvice to theEuropeanCommissionat theendofMarch2010.

In July2010CEIOPS initiatedanotherpublicconsultation, followinganewCall forAdvice3bytheEuropeanCommission,onequivalenceassessmentstobeundertakenonthebasisofArticles172,227and260oftheSolvencyIIDirective.ThefinaladvicewasdeliveredtotheEuropeanCommissionbythesetdeadlineofAugust2010.

A third public consultation, this time on the methodology for equivalence assess-mentsunderSolvencyIIwasfollowedbyCEIOPSfinaladviceinNovember2010.

FollowingtheEuropeanCommissionletter4of29October2010,CEIOPSinitiatedtheequivalenceassessmentsoftheSwissandBermudiansupervisorysystemsunderAr-ticle172oftheSolvencyIIDirectivedealingwithreinsurancesupervision,Article227,dealingwiththeinclusionofrelatedthirdcountryinsuranceandreinsuranceunder-takingsingroupsolvencycalculationandArticle260,dealingwiththeequivalenceofthirdcountrygroupsupervision.AsperrequestoftheEuropeanCommission,CEIOPShasalsoinitiatedtheequivalenceassessmentoftheJapanesereinsurancesupervi-sorysystemunderArticle172.

TodeliverontherequestoftheEuropeanCommissionCEIOPSissuedaCallforEvi-dence5on1December2010relevanttotheseequivalenceassessments.CEIOPSin-vitedallinterestedpartiestoprovideinformationandevidenceastotheirexistingexperienceonaspectsoftheimplementationoftheinsuranceregulatoryregimeandsupervisorypracticesinthethreecountriesconcerned.

Secondly,CEIOPScontactedtheSwissFinancialMarketSupervisoryAuthorityFINMA,the Bermuda Monetary Authority (BMA) and the Japan Financial Services AgencyJFSA.Toassesstheirequivalency,CEIOPSsentquestionnairesforcollectinginforma-tionconcerningtheirrespectivesupervisorysystems.

CEIOPSwillcontinueitsequivalenceworkthroughoutthefirsthalfof2011withthegoal todeliverfinaladviceby theendofSeptember2011.Thefinaladviceshouldincludeafullconsultationabouttheassessmentsofthesethreecountries.

Edward ForshawConCoEquivalenceSCChairFSA,UnitedKingdom

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OCCuPATIOnAL PEnSIOnS

CEIOPSworkonoccupationalpensionsin2010continuedtofocusontheexchangeofinformationandsupervisorycooperationinrelationtotheInstitutionsforOccu-pationalRetirementProvision(IORP)Directive.Althoughcross-borderIORPsreceivedafairshareofattention,topicsextendingtonationalIORPsaswellasnon-IORPpen-sionswereconsideredaswell,mainlyasaresponsetoEUwideinitiativesintheafter-mathofthefinancialandeconomiccrisis.

CEIOPS follow up to its 2008 key implementations report6 included: the definitionofcross-borderactivity;thering-fencingofIORPs’assetsandliabilities;supervisoryreportingandinformationtomembersandbeneficiaries.Additionally,CEIOPSWorkProgrammefor2010envisaged:●2010updatetoCEIOPSReportonMarketDevelopments;●analysisoftheconsequencesofthefinancialcrisisonpre-crisissupervisorymeth-

odsandapproaches;●reportoninternalcontrolsinIORPs;and●analysisofrisksfacedbymembersofdefinedcontribution(DC)pensionschemes.

Projectswerealsoundertaken that felloutside the2010workprogramme. TheseincludedaninvestigationintotheimplicationsforpensionsofissuesrelatingtotheEuropeanCommission’sinitiativeonPackagedRetailInvestmentProducts(PRIPs),anupdatetoCEIOPS2009mappingofEUprudentiallegislationapplicabletopensioninstitutionsorschemesintheEuropeanEconomicArea(EEA)forinclusionintheEu-ropeanCommission’sGreenPaperonpensions,andaresponsetotheGreenPaperitself.Progresswasmadeinallareaswithinthereportingyear.

InMarch2010apaperonpracticalissuessurroundingthedifferentinterpretationsofcross-borderactivitywascompleted.AttherequestoftheEuropeanCommissionfurtherworkfollowedtoformulatepolicyoptionsforpossiblesolutionstotheissuesraisedinthepaper.Bothpapers7/8weresenttotheEuropeanCommissioninNovem-ber2010andlatersubmittedforconsiderationtotheEuropeanInsuranceandOc-cupationalPensionsCommittee(EIOPC).

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In January 2010, CEIOPS, on its own initiative, started an investigation into PRIPs-relatedissuesforpensions.ThisfollowedthedecisionbytheEuropeanCommissioninDecember2009toexcludepensionsfromthescopeofitsproposalonPRIPs.Thetask was to shadow developments on non-pension PRIPs at the cross-sector (3L3)LevelaswellasmonitoringEU-widedevelopments.Threesurveyswerescheduled,coveringalltypesofsupplementarypensionplansandproductsintheEEA,whetheroccupationalorpersonal,togatherinformationrelevantforfuturepolicydecisions.AdatabaseofsupplementarypensionplansandproductswillbecompletedinMarch2011.Afinalreportonpre-enrolmentinformationrequirementsforalltheplansandproductscoveredbythedatabasewillbereadyinthemiddleof2011.InJune2011workwillstartonthemappingofsellingpracticesastheyapplytopensions,withareportonfindingsplannedfor theendof2011.Anypolicy recommendations thatmayfollowwillconsidertheoutcomeoftheconsultationonthepensionsGreenPa-perandthescopeofthereviewoftheIORPDirectiveenvisagedforlaterin2011.

CEIOPS’responsetotheGreenPaperwassubmittedtotheEuropeanCommissionon15November201012.

In2011,byfarthebiggestandmosthighprofilepartofEIOPA’sworkintheoccupa-tionalpensionsareawillbearesponsetotheEuropeanCommission’sCallforAdviceonthereviewoftheIORPDirectiveandtherelatedimpactassessment.Atthetimeofwriting,neitherthecontentoftheCallforAdvicenorthetimetablefordeliveryhavebeenconfirmedbytheEuropeanCommission.However,EIOPAstandsreadytoadaptitsresourcesanddrawupdetailedplansforatimelydeliveryofitsadviceassoonastheinformationbecomesavailable.

July2010sawtwopublicationsonpensionsrelatedmatters.Onewasthe2010re-portonMarketDevelopments9,whichtracksoverallactivityanddevelopmentsintheEuropeancross-borderoccupationalpensionsmarketsincetheIORPDirectivecameintoforce.Theotherpublicationwasanissuespaperanalysingtheeffectivenessofring-fencing measures in protecting pension benefits in stress situations (Article16(3)oftheIORPDirective)10.

InNovember2010,aReportonManagementOversightandInternalControlsRulesapplicable to IORPs was published , as a follow up to CEIOPS 2009 Report on RiskManagement.ItwasbasedonasurveyofCEIOPSMembersand,similarlytoitspred-ecessor, it revealedagreatdiversityandcomplexity inMemberStates’approachesand practices. However, certain Europe-wide trends in IORPs internal controls hadalsobeenidentified.

Ananalysisoftheconsequencesofthefinancialcrisisonpre-crisissupervisorymeth-odsandapproachesrelatingtoIORPswascompletedattheendof2010.Giventheexisting differences in the occupational pensions systems of Member States theworkwasundertakenprimarilyforinternalexchangeofinformationpurposes.Theresponses from individual supervisors were mostly specific to the nature of theirownMemberState’ssystems.Broadly,theanalysisrevealedthatsupervisorsreactedpromptlytotheimmediateeffectsofthecrisisonIORPs.Sponsorsusedamixtureofshorttermmeasuresfocusedonthemoreurgentissuesandconcerns,butwerealsotakingintoconsiderationthelongertermimpacts.Ingeneralthesupervisorystruc-turesandtheinternalorganisationremainedlargelyunchanged,althoughtherewasa clear increase in the exchange of information with other supervisory authoritesresponsible for financial stability or for direct or indirect regulation/supervision ofIORPsintheirMemberStates.

ConsideringthegrowingimportanceofDCtypeoccupationalpensionprovision,aninvestigationintorisksfacedbymembersofsuchschemeswasundertakenin thesecondquarter2010.Themappingofrisksatkeystagesofthelifecycleofapartici-patingmemberwascompletedinSeptember2010andanumberofkeyrisksselect-edforfurtheranalysis.ParticularconsiderationisbeinggiventothevariousmethodsusedbyMemberStatestomitigatetheserisks.Afinalreportonfindingsisplannedforthemiddleof2011.

Work on supervisory reporting requirements continued throughout the year withthe aim to analyse the differences among Member States in their supervisory ap-proachesandtoassessanylinksthatmightexistbetweenthesizeandnatureofthemarket, thetypeofasupervisorysystemandtheamountandfrequencyofsuper-visoryinformationrequired.AreportonfindingswillbepublishedintheSpringof2011.WorkoninformationrequirementsincrossborderIORPshasbeendeferredforthetimebeing.

Brendan KennedyOPC-ChairThePensionsBoard,Ireland

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fInAnCIAL STAbILITy

In view of the financial and economic crisis, CEIOPS, since 2008, considerably in-creaseditsemphasison,andresourcesdevotedto,financialstabilitymattersrelatingtotheinsuranceandoccupationalpensionssectors.Workonfinancialcrisisissueswasgivenhighestpriority.ThissectionoutlinesworkcarriedoutundertheCEIOPSworkprogrammefor2010.CEIOPSwasrepresentedinnumerousmeetingsoftheEu-ropeanCouncil’sFinancialServicesCommittee(FSC)andtheEconomicandFinancialCommittee(EFC),includingtheEFC’sFinancialStabilityTable(EFC-FST),anddeliveredvariousreportsandupdatesinresponsetotherequestsoftheseCommittees.

EndofJanuary2010,followingthediscussionattheFSCmeetingheldon20Janu-ary2010inpreparationoftheforthcomingEUdiscussionontheFinancialStabilityBoardpaperonsystemicrisk,CEIOPSpreparedanoteonsystemicriskcomponentsofinsurancebusinessmodelsinwhichitanalysestheinsurancesectorasawhole.CEIOPSMembersconcludedthatinthelatestfinancialcrisistheEuropeaninsurancesectordidnotturnouttobeasourceofsystemicrisk,butinstead,hadcontributedtothestabilityofthefinancialsystemasawhole.However,awide-spreaddisruptionamongstinsurerscouldbeasourceofvulnerabilityforothersectorsofthefinancialsystem.CEIOPSconsideredthattheinterconnectednessoffinancialsectorsandlinksoftheinsurancesectorwiththerealeconomyarecrucialtorecognisingtherelevanceof insurancetosystemicrisk.The“systemicrelevance”ofrisksrelatestocontagionlikelihoodbymeansoftheinterdependenciesinplaceamongst(re)insuranceunder

takingsandwithothermarketplayers.Theselinkageshavedevelopedconsiderablyinthelastfewyears.

InlinewiththemandatefromtheEFC-FST,CEIOPScommittedinitsworkprogrammefor2010to:●bi-annualreportingonfinancialconditionsandfinancialstabilityintheinsurance,

reinsuranceandoccupationalpensionssectors;●deliveryofsectoralriskassessmentasinputtothe3L3reportsoncross-sectorrisks

tofinancialstabilityinEurope;●conductinganEurope-widestresstestexerciseintheinsurancesector;and●monitoringnationalmeasurestakenbysupervisorsinresponsetothecrisis.

Asinpreviousyears,inJune2010,CEIOPSpublishedthefirstofitsbi-annualreports–itsSpringreportonthemainmarkettrendswithintheinsuranceandoccupationalpensionssectors.CEIOPSsecondbi-annualreportpublishedinDecember2010,con-tained theannualassessmentofdevelopments in the insuranceandoccupationalpension sectors, and highlighted financial stability implications and uncertainties.CEIOPSconsidered that the riskshavenot increased in2010but remainatahighlevel.Ononehandmarketvolatilitieshavepeakedagainleadingtonewlyincreasedconcernsaboutpublicdebtandthemacro-economicoutlook.Allinalltherestillis

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Kajal VandenputFSCChairCBFA,Belgium

8.1 Insurance Stress Test

CEIOPSconcludeditsfirstEUwidestresstestinearly2010.Thegoalofthestresstestwas toevaluate theoverall resilienceof the insurancesector to theeconomicandfinancialmarketsenvironmentunderseveralstressscenarios.

CEIOPS presented the findings of its European-wide stress test for the insurancesectortothemembersoftheEUEconomicandFinancialCommittee(EFC)inMarch201013.The exercise included 28 large and important European insurance groups,covering above 60% of premiums of the European insurance market. Participatinginsurance groups were asked to calculate the impact of stresses on their solvencyratiosunderthreescenarios:anadversescenarioandtwoadditionalseverescenarios(adeeprecessionandaninflationscenario).TheresultsindicatedthatthelargeandimportantEuropeaninsurancegroupswouldremainresilienteveninseverescenar-ios.Inallscenarios,theaggregatedlevelofavailablecapitalexceededtheregulatoryrequirements.

InNovember2010,CEIOPSdecidedtoconductanewstresstestandstarteddiscus-sionsontheframeworkattheendof2010.ThistestshouldbebasedontheSolvencyIIframework(asitwasdefinedinQIS5).Resultsofthisstresstestareexpectedmid2011.

InlinewiththenewEIOPAregulation,stresstestswillbedoneincooperationwiththeEuropeanSystemicRiskBoard(ESRB).

uncertaintyonthefuturedevelopments,specificallywithregardtothedevelopmentofinterestratesandassetprices.Ontheotherhand,regardingfinancialmarketcon-ditions,somepositivesignalshademerged,forexamplethenumberofinsurersonnegativeratingwatchdecreased.Thereportalsoconsideredthedevelopmentoftheoccupationalpensionfundssector.TheimpactofthefinancialcrisisontheEurope-anoccupationalpensionsystemhadnotbeenassevereasseen inotherfinancialsectors,asthelongtermnatureoftheliabilitiesaffordssomeprotectioninthisre-spect, and Institutions for Occupational Retirement Provisions (IORPs) had not ex-perienced the liquidity problems seen elsewhere. However, the crisis hit pensionfundsprimarilyintheirroleasinstitutionalinvestorsandhadasignificantimpactonconsumerconfidenceinthosecountrieswhereoccupationalpensionsaccountforalargepartofretirementbenefits.Asfor2010,therecoveryoffinancialmarketsledtorelativelyhighinvestmentreturns,appreciationofassetsandhigherfundingratiosofIORPs.

Inordertorespondtotheneedforregularmonitoringofdevelopmentsandtheim-pactofthecrisisoninsuranceandoccupationalpensionssectors,aswellastoensuretimelinessoftheinformationcontainedinCEIOPSbi-annualreporting,CEIOPSmadeconsiderable improvements to its tools and systems for data collection on invest-mentportfoliosin2010.DuetothesovereigndebtcrisisCEIOPSprovidedananalysisofthediversificationofinvestmentportfoliosofinsuranceandoccupationalpensionfundstoCEIOPSmembersandpoliticalbodies.Portfoliosofinsuranceundertakingsandoccupationalpensionfundsseemingeneraldiversified.

ThetimelinessofCEIOPSdatacollectionimprovedconsiderably throughestablish-ing a representative sample of occupational pension funds and insurance groupsthrough which data was collected through a fast-track method. Furthermore, alsoin 2010, qualitative information on supervisors’ assessment of the main risks andtheirrelevancetotheirmarketsintheforegoneperiodaswellasintheforthcomingperiod,hasbeengatheredthroughregularsurveys.

Inthefallof2010CEIOPSandthepreparatorySecretariatoftheEuropeanSystemicRiskBoard(ESRB)startedtheircooperation.Alsointhefallof2010 twoHighLevelGroupsweresetupbetweenthethreeCommitteesandtheEuropeanCentralBank:ondataexchangeandsystemicrisk.

Asanothercrisisrelatedinitiative,CEIOPSestablishedacrisiscontactlistforitsMem-bersinOctober2008.ThelistcontainscontactinformationforeachMemberandwasregularlyupdatedduring2009/2010andagainwiththeestablishmentofEIOPAinearly2011.FurthermoreMemberswerekeptinformed,throughtheemailalertpro-cedurethatwasestablishedinSeptember2009,onsupervisoryinterventionsinin-dividualcompanies.AcrisismanagementprocedurewassetupinDecember2010incooperationwiththeotherLevel3Committeestoexplaintheprocedures,tasksandresponsibilitiesofEIOPA’sManagementanditsMembersincaseacrisisemerges.

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SuPERvISORy CuLTuRE, COnvERgEnCE And CO-OPERATIOn

9.1 Supervisory Culture and Convergence

CEIOPS fulfilled the commitment made in its work programme 2010 to furtherstrengthenitsfocusonhorizontalactivitiesaimedatdevelopingcommonsupervi-sorypractices–suchasmediationandpeerreviews–andcommonsupervisorycul-ture–suchasexchangeofstaffandtraining(seechapters9.5and12.6)–aspartofitsdrivetoincreasesupervisorycooperationandconvergenceintheinsuranceandoccupationalpensionssectors.

9.2 Supervisory Practices: Mediation

Thescopeofmediationistoresolvepotentialdisputesbetweensupervisoryauthori-tiesinanon-bindingway.ThemediationprocessthathasbeendevelopedbyCEIOPSwastestedinthesecondquarterof2010throughamediationsimulationexercise,whereabroadrangeofCEIOPSMembersvolunteeredtoparticipateandtoperformthespecificrolesinthemediationmechanism.Thefindingsandrecommendationsderived from the simulation exercise have been included in the CEIOPS Report onMediationandwillserveasabasisforthereviewofCEIOPS“Protocolonmediationmechanismbetweeninsuranceandpensionssupervisors”underEIOPA.

9.3 Supervisory Practices: Preparation of Super-visors to Implement Solvency II

InJuly2010CEIOPSendorsedandpublished14areportthatanalysestowhatextentInsuranceSupervisorsarepreparedtoimplementSolvencyII(moreaboutCEIOPSSol-vencyIIworkseechapter6.2).SolvencyIIimplementationisacomplexprocessandthereforeitisessentialtoconcentrateondetailedpracticestopreparesupervisors.ThereportthataimedatidentifyingareasofadditionalworkforMembersandCEIOPS,wastheoutcomeofaquestionnaireconductedamongmembersinApril2010.

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Fromaquantitativepointofview,thenumberofpeopleengagedinstaffexchangeactivitieshasbeenmaintainedduring2010comparedtothepreviousyear.In2010,17peopleparticipatedinasecondmentprogrammeand86peoplefrom24Authori-tieswereengagedinastudyvisit,sixmorecomparedto2009.Inaddition,nationalEuropeansupervisoryauthoritieshavereportedfoursecondmentsand53studyvis-itsinvolvingsupervisoryauthoritiesoutsideoftheEuropeanUnion.

9.4 Supervisory Practices: Peer Review

ThepeerreviewasatoolforsupervisoryconvergencewastestedbyCEIOPSoverthepasttwoyearsinanexerciseassessingtheapplicationofprotocolsforsupervisorycollaboration incross-bordercases (seechapter10).Withregardtooptimisingtheworkonthefuturepeerreviewprojects,in2010therewasanITtoolforself-assess-mentsdeveloped,whichisnowpartoftheEIOPAinternalwebsite.Itwillbeusedfordevelopingself-assessmentsandreportingontheresultsfromrespondents.

9.5 Staff exchanges

AspartofCEIOPS’commitmenttosupportthedevelopmentofcommonsupervisorypractices,CEIOPShasfurtherinvestigatedpotentialspecificactivitiestoencourageMemberstoparticipateinstaffexchangesin2010.

ConsequentlyCEIOPSsupervisoryculturewebpagewasre-designedin2010asasec-tionofanenhancedCEIOPSwebsite.Thenew,friendlierpageincorporatesthelatestITimprovementstofacilitateinteractionswithinCEIOPSonmattersrelatingtostaffexchange,suchastheoverviewofopeningsandincreasedaccessibilityforallmem-berstopostingauthorities.

Raffaele CapuanoConCoChairCOVIP,Italy

Secondments(staff members

involved)

Study visits(staff members

involved)Authorities involved

2007 8(7toCEIOPS)

12 13

2008 16(10toCEIOPS)

67 23

2009 16(10toCEIOPS)

80 23

2010 17(12toCEIOPS)

86 24

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Michel FlaméeReviewPanelChair

CBFA,Belgium

REvIEW PAnEL

InDecember2010,CEIOPS’Review15Panelcompletedthefirstpeerreviewexercise.Thefinalreportsonthepeerreviewdemonstratethatthepeerreviewisaneffectivetoolforsupervisoryconvergence.Themainresultsfromtheexerciseshowthatmostof the Review Panel’s recommendations and explanations to Members have beentakenonboardandimplemented16bytheendofthepeerreview.TheReviewPanelhasidentifiedissuesandgapsintheoverallfunctioningoftheGeneralandBudapestProtocolssomeofwhichhavebeenclarifiedduringthepeerreview;othersrequirefurtheranalysisandshouldbetakenupbytheEuropeanInsuranceandOccupationalPensionsAuthority(EIOPA).

ThepeerreviewexercisestartedinAugust2008andaimedatassistingMembersinimprovingsupervisoryco-operationandenhancing theapplicationof the General,Budapest and Helsinki Protocols17. A full peer review (including the second phase“ReviewbyPeers”)wasundertakenregardingtheGeneralProtocol.TheReviewPaneldecidedtoconductonlyanin-depthanalysisoftheself-assessmentsregardingtheBudapestProtocol,havinginmindtherevisionof theprotocolafter thebeginningofthepeerreview.TheHelsinkiProtocolandrelatedguidelinesarecurrentlybeingrevisedinviewoftheregulatorychangesrelatedtoinsurancegroupsupervisionasaresultofSolvencyII.Therefore,inordernottointerveneintheseregulatorydevelop-ments,theReviewPanelwilldecideonthewayforwardofthereviewprocessassoonastheregulatorychangesarecompleted.

TheReviewPaneliscurrentlyconsideringnewpeerreviewprojectsonthebasisofthefirstpeerreviewexerciseandinlinewiththenewtasksfromtheEIOPARegulation.

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COnSumER PROTECTIOn

2010wasabusyyearforCEIOPSintermsofitsworkonconsumerprotectionmatters.

CEIOPS continued to consider the issue of Packaged Retail Investment Products(PRIPs)bothsectorallyandina3L3context.A3L3TaskForceonPRIPswassetuptoformulateacommon3L3positiononthescopeofPRIPsandtheappropriateprinci-plesforpre-contractualproductdisclosuresandsellingpractices.

TheTaskForcewaschairedbyAnneliTuominen,FIN-FSAandwascomposedofequalnumberofrepresentativesfromCESRandCEIOPS,aswellasexpertsfromCEBSonstructureddeposits.

Fivemeetingswereheldbetween9April2010and10September2010.AfinalreportwassubmittedtotheEuropeanCommission,underajoint3L3Chairscoverletter,on6October2010andpublishedon3L3websiteson12October2010.

TheTaskForcesought,whereverpossible,toformconsensualviewsonthekeyaspectsofPRIPs.However,wherethiswasnotpossible,alternativepositionswereexpressed.TheCommissionpublishedaConsultationPaperonitsproposedlegalframeworkforPRIPsscopeandproductdisclosureon26November2010.DraftlegislativeproposalsarenowexpectedinJune2011.LegislativeproposalsregardingsalesofPRIPs,whichwillbeincorporatedinarevisedMiFIDandIMD,arenotexpecteduntillaterin2011.CEIOPSstandsreadytoassistwithanyfurtherpolicyworkbytheCommissioninthisarea.

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CEIOPSalsosubmittedAdvice to theCommissionon therevisionof the InsuranceMediationDirective(IMD)on11October2010.ThiswasinresponsetoaRequestforAdviceitreceivedfromtheCommissionon27January2010.

AspecialisedTaskForcewassetupundertheauspicesofCEIOPS’CommitteeonCon-sumerProtection(CCP)inFebruary2010topreparetheAdvicetotheCommission.TheTaskForcewassplit intothreeDraftingTeams: (i)LegalFramework,ScopeandProfessionalRequirements;(ii)ConsumerProtection(TransparencyofRemunerationand Conflicts of Interest) and (iii) Cross-Border Aspects (Registration and Notifica-tions).

AnumberofmeetingsoftheDraftingTeamsandtheCCPwereheldbetweenMarchandendofSeptember2010withaviewtofinalisingtheAdvice.CEIOPSalsoreceivedinformaloralandwritteninputfromkeystakeholderssuchasBIPAR(theEuropeanFederationofInsuranceIntermediaries);CEA(EuropeanCommitteeofInsurers)andconsumerrepresentativesonCEIOPS’ConsultativePanel.

ThefinalAdvicesubmitted,contained39recommendationsandcoveredthesevenareasintheRequestforAdvice,thekeyonesbeingTransparencyofRemuneration/ManagementofConflictsof Interest, LegalFrameworkandScope.CEIOPSalsoad-dressedareasintheexistingIMDwhereadministrativeburdencouldbeeradicatedor,ifnot,reduced.

TheCommission’sConsultationPaperontherevisionoftheIMDwaspublishedon26November2010,settingoutitsproposedthinkingonthewayforward.Draftlegisla-tiveproposalsareexpectedinthefirstweekofDecember2011.CEIOPSalsoattendedapublichearingontheIMDRevisionon10December2010atwhichtheChairoftheCCP,VictorRod,moderatedapanel.

CEIOPS was invited by FIN-NET (a financial dispute resolution network of nationalout-of-courtcomplaintschemesintheEuropeanEconomicArea,EEA)topresentitswork on consumer complaints. This included CEIOPS’ various contributions in thehandlingofconsumercomplaints.

InJuly2010,theEuropeanCommissionpublishedaWhitePaperonInsuranceGuar-anteeSchemes,includinganimpactassessment.TheECWhitePaperproposedop-tionsthataresimilartotherecommendationspresentedbyCEIOPSin2009.

CEIOPSTaskForceonIGS(undertheChairmanshipofOle-JoergenKarlsen)submit-tedcommentstotheCommissionontheWhitePaperandtheImpactAssessment.CEIOPSfivemostimportantrecommendationstotheCommissionweretoadoptaholistic approach for determining the scope of IGS, to be aware of the differencesbetween thebankand the insurancesector, to leave roomfornationalchoices, toanalysecarefullythefundingissueandtotakemotorinsuranceintoconsideration.

Victor Rod CCPChairCAA,Luxembourg

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OThER ACTIvITIES

12.1 Accounting

CEIOPSspecificaimwastoensureconsistencyandcompatibilitybetweenthegeneralaccountingframeworkandthevaluationrulesunderSolvencyII.Tothisend,in2010,CEIOPSprovided the InternationalAccountingStandardsBoard (IASB)withacom-mentletteronbothIASB’sExposuredraftsonbothinsurancecontracts(IFRS4)andondefinedpensionplans(IAS19).CEIOPSalsoprovidedtheEuropeanFinancialReportingAdvisoryGroup(EFRAG)aswellasIASBwithcommentlettersonexposuredraftsonboth,fairvalueoptiononfinancialliabilitiesandmeasurementofliabilities(IAS37).

CEIOPSwasparticipatingactivelyasanobserverintheEuropeanCommission’sAc-countingRegulatoryCommitteeandinEFRAG’sInsuranceaccountingworkinggroup.

12.2 International Relations

CEIOPSMemberswereactivelyinvolvedintheworkofinternationalassociationssuchastheInternationalAssociationofInsuranceSupervisors(IAIS)andtheIn-ternational Organisation of Pension Supervisors (IOPS).Where relevant, regularupdatesontheactivitiesofthesebodieswereprovidedorshared,andwerethenfedintorelevantCEIOPSworkstreams.

Inviewofitsstrongerroleininternationalrelations,EIOPAwillconsidermoreac-tiveinvolvementinrelevantworkstreamsofinternationalorganisations.

12.3 Regulatory Dialogues

CEIOPS’regulatorydialoguescontinuedtotakeplacein2010.MeetingswereheldinOctober2010withspecificUSInsuranceCommissionersandNAICstaffintheframeof the EU-US Dialogue, with the Chinese Insurance Regulatory Commission (CIRC)intheframeoftheSino-EUDialogue,withtheJapaneseFinancialServicesAgency(JFSA)duringtheJapan-EUDialogueandwiththeAssociationofLatinAmericanIn-suranceSupervisors(Assal)duringtheAssal-EUDialogue.

Recurrentissuesontheagendawereupdatesonthedevelopmentoftheinsurancemarkets and regulation on both sides, as well as discussions relating to insurancegroupsupervision,theassessmentsoftheequivalenceofspecificthirdcountrysu-pervisoryregimes,thedevelopmentofthenewstructureforfinancialsupervisioninEurope,accountingortheexchangeofexperienceonspecificitemsofinterest.

EIOPAwillcontinuetodevelopthesedialoguesandexchangesandremainsopentoexchangeviewswithotherthirdcountries,asithasdoneinthepast.

12.4 CEIOPS Conference

In2010,CEIOPSorganisedits6thAnnualConference,whichtookplaceon17Novem-ber2010inFrankfurtamMain,Germany.Itattractedmorethan300participants.

The conference offered an interesting and exciting programme, as well as an op-portunitytohearfromexperiencedandrespectedfiguresinEuropeanfinancialsu-pervision.The latestdevelopmentsaffectingEuropean insuranceandoccupationalpensionswerecovered,togetherwiththenewsupervisoryarchitectureforfinancialservicesinEurope.

CEIOPSConferencewasopenedbyitsChairMr.GabrielBernardinoandincludedtwokeynotespeakers,whichare:●JonathanFaull–DirectorGeneral,DGInternalMarketandServices,EuropeanCom-

mission●SharonBowles,MEP,ChairoftheEconomicandMonetaryAffairsCommittee(ECON),

EuropeanParliament.

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12

Publicsector(40),13%

Consultance(25),8%

RealEstate(8),3%

Trade/Industry(7),2%

IT(4),1%

Banking/Finance(66),21%Misc.(20),6%

Insurances(78),24%

Press,Media(30),9%Judicary(11),4%

University(6),2%

Politics(14),4%

Associations(11),3%

CEIOPSConferencehadthreepanels:●Insurance–TheSolvencyIIpanelfocusedonthelevelofpreparednessofinsurance

undertakingsandtheirsupervisorsfortheimplementationofthenewframeworkdirective.Industry,CommissionandCEIOPSrepresentativesreportedonthemajorachievementsandchallengesaheadinensuringasuccessfultransitiontothenewsolvencyregime.CEIOPSSecretaryGeneralalsoprovidedattendantswithanearlyreportontheparticipationrateintheQIS5exerciseandwithanoverviewofactionstobeundertakeninordertoensureaReportispublishedinMarch2011.

●Occupational Pensions – The discussion in the pensions panel focused on theEuropean Commission Green Paper on pensions as well as on main challengesfacingthesectortowardsensuringatruesinglemarketforoccupationalpensionsiscreated.Duringthepanel,CEIOPSfurtherwelcomedtheGreenpaperasanim-portanteventforEuropeanpensionsandexpressedfullsupportforitsobjectives.ItwasfurthernotedthatCEIOPSresponseandfurthercontributionwillfocusonthoseissueswithinthecompetenceofCEIOPS,whichwerenotpoliticalinnature.Itwasalsohighlightedthoseareas,which,althoughoutsidesupervisorycompetence,wouldmeritCEIOPSinvolvementonthegroundsoftheconsiderabletechnicalex-pertiseandsupervisoryexperienceofitsMembers

●ThenewSupervisoryAuthorities(ESAsandESRB)–underthesteerofMEP–SharonBowles(ECONChair,ALDE),thepanelbroughttogethertheChairofthe3L3Com-mitteesaswellastheECBVice-President.Theydiscussedthelatestdevelopmentsintermsofsettingupthenewsupervisoryinfrastructure,bothatmacroandmicrolevels.Challengesaheadaswellasearlyindicationofactionstobetakentoensureasuccessfultransitiontothenewframeworkwerecentraltothediscussion.

EFW2010:CEIOPSConference

AnalysisParticipantsbyBusinessSector(Participantstotal:328)

12.5 Web Site

Sinceitslaunch,theCEIOPSwebsitehasproventobethemostsuccessfulcommu-nicationtoolfordisseminatinginformationbothtoexternalstakeholdersaswellasCEIOPS Members. Statistics show that the interest of stakeholders and interestedparties tousetheCEIOPSwebsitehasremainedhighwithmorethan12.5millionhitsoverthecourseof2010.

Inordertocaterfortheincreasednumberofpublications&visitorsandtoprovideenhancedsecurityfeatures,CEIOPSSecretariatundertookamajorprojectthrough-out2010ofrestructuringtheexistingtechnicalplatform.TheprojectbenefitedfrompartialEuropeanCommissionfunding.ThenewCEIOPSwebsiteisdesignedtopro-videimprovedsecurity,enhancedusabilityandefficiencywhilemaintainingsomeoftheexistingfunctionalitiesthatCEIOPSmembersandstakeholdershaveappreciatedoveryears.ThenewCEIOPSwebsitewaslaunchedon20September2010.

12.6 Training

CEIOPSbelievesintheroleoftraininginthedevelopmentofacommonsupervisorypracticeandthebuildingofacommonsupervisorycultureacrossEurope.Thereforeoneofthemaingoalssincethebeginningwastoofferqualitytrainingfreeofchargeto European supervisors. CEIOPSTraining Programme for 2010 was partly open toindustryparticipantsandsupervisors fromcountriesoutsideof theEuropeanEco-nomicArea(EEA).

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12Industry,27%

EEAsupervisors72%

NonEEAsupervisors,1%

Analysis2010trainingparticipants

In2010,atotalof1082participantsattendedthetrainingactivities,ofwhich:●667MembersandObserversAuthorities:CEIOPSanditssisterCommittees,CEBS

andCESR●400industryrepresentatives.●7participantsfromnonEEAcountries:3FINMA(Switzerland),1MinistryofFinance

Israel,1BermudaMonetaryAuthority,1AustralianPrudentialRegulationAuthority,1InsuranceDivisionStateofNewMexico;and

●8participants fromother institutions:2GibraltarFinancial ServicesCommission,2ECB,1preparatoryESRBSecretariat,2Bundesbankand1IAIS.

Atotalof21trainings(15sectoralseminars,3cross-sectoralseminarsand2work-shops)wereorganisedbyCEIOPSin2010.ThiswaspossiblethankstothesupportfromCEIOPSCommitteesandWorkingGroups,whichprovidedexpertsandspeakers,andontheco-operationofCEIOPSMembers,byhostinghalfoftheseminars.

Complementarytothesectoralandcross-sectoralseminars,thetrainingprogrammewasextendedwithtwo‘trainthetrainer’workshops,aimedatdevelopingthecom-municationskillsofworkinggroups’expertstypicallyinvolvedinthedeliveryofsemi-nars.Thiswasdevelopedthroughthesupportofaprofessionaltrainer.

In2010,CEIOPSMembersfocusedtheireffortsonincreasingthequalityandvarietyoftraining.Thedecisionmadein2010,followingthefeedbackprovidedbysupervi-sors,wastoincreasethelengthofseminarsfrom1to2days,especiallythosecover-ingSolvencyIIaspects.Thetablebelowshowsthetrendofanincreasednumberoftrainingdayssince2007.

2010CEIOPSsectoralseminars●StressTesting-Frankfurt,23March●InsuranceGroupssupervision–hostedbyACPinParis,1April●RegionalseminaronCorporateResponsibilityofDirectorsofInsuranceCompanies

(opentotheindustry)–hostedbyMaltaFSA,8–9April●SolvencyII–NewSupervisoryFramework–Frankfurt,4–5May●Advancedtechniquesofriskmitigationandriskmanagement(incl.securitisation,othernew

financialinstruments)–Frankfurt,6May●SolvencyIIvaluationofassetsandliabilities,includingTechnicalProvisions–hostedbyISVAP

inRome,13–14May●SolvencyIIReportingandPublicDisclosureRequirements–hostedbyHFSAinBudapest,7–8June●SolvencyIIQIS5,Frankfurt,8–9July●SolvencyIIQIS5(opentotheindustry)–Frankfurt,25–26August●Groupsolvencyassessment–Frankfurt,9–10September●Consumerprotection–hostedbyNationalBankofSlovakiainBratislava,22September●SolvencyIIGovernanceSystem(incl.Riskmanagement,ORSA)–hostedbyPolishFSAinWarsaw,

8October●Pensionsseminar–hostedbyDNBinAmsterdam,14–15October●Internalmodelsapproval–Frankfurt,27–28October●IFRSAccounting–hostedbyCNBinPrague,2November

2010CEIOPSworkshops●Trainthetrainer;PresentingwithImpact–Frankfurt,21–22July●Trainthetrainer;PresentingwithImpact–Frankfurt,20–21October

35

30

25

20

15

10

5

0 2007 2008 2009 2010

Seminars Trainingdays

Evolutionseminars&durationofseminars

The 2010 Training Programme was supported by the European Commission, bymeansofaco-fundingprogramme,whichmadeitpossibletofinance90%ofthetrainingcostsfromnon-CEIOPSfunds.

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3L3 SECTIOn Of ThE 3L3 COmmITTEES 2010 AnnuAL REPORTSInCLudIng CROSS SECTOR WORk

The jointworkof the3 Level3Committees (3L3),CESR,CEBSandCEIOPS, focusedonachievingconvergencebetweenthefinancialsectorsofsecuritiesmarkets,creditinstitutions(banks),andtheinsuranceandpensionsmarkets.Theinter-linkagesofthese sectors called for close co-operation among the 3L3 Committees in order toensureaEuropeanlevelplayingfield,consistencyinlegislativeimplementation,costeffectivenessandproperassessmentofcross-sectorrisks.In2005,the3L3Commit-teesformalisedthisco-operationbysigningajointprotocolonco-operation.InDe-cember2008,thisprotocolwasupdatedtoreflectthe3L3experiencesofjointworkcompleted,andtotakeintoaccountthelatestdevelopments,suchastheLamfalussyreviewandtheeffectsofthefinancialcrisis..

13.1 3L3 provided input in preparing new European financial supervisory framework

The3L3ChairsandSecretariatsregularlymetanddealtwithallactivitiesdescribedinthe3L3workprogrammeduring2010,wheretheirprioritywastheirsupervisoryresponsetothereformoftheEUfinancialsupervisoryarchitectureandtheprepara-tionoftheLevel3CommitteesfortheirtransitiontothenewEuropeanSupervisoryAuthorities(ESAs).

Inthisrespect,the3L3activelyfollowedandco-ordinated,wherenecessary,develop-mentsinrelationtotheproposalssettinguptheESAs.TheLevel3ChairsandtheirrespectiveSecretaryGeneralsandSecretariats regularlyconvenedconferencecalls,exchangedbriefingsandmetofteninadvanceofmeetingswiththeEUinstitutions.On 18 June 2010, the 3L3 Committees submitted a detailed note to the EU insti-tutionsinvolvedinthetriloguediscussionsoutliningtheirspecificconcernsonthebasicquestionsoftheclearassignmentofresponsibilitiestotheESAs,theiraccount-abilityandtheirindependence.Thenoteconsideredfivemainissues:●The independence of the Authorities - independent financing of the Authorities,

selectionoftheChairpersonandtheExecutiveDirector,compositionoftheBoardofSupervisors,BoardofAppealandPeerReview;

●Crisissituationandemergencymeasures;●Enhanced3L3cooperationthroughthe“JointCommittee”;●CollectionofinformationandcooperationwiththeESRB;and●Operationalissueslinkedtothetransition.

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13 Several meetings were held during 2010 with the European Commissioner for In-ternalMarketandServices,MichelBarnier,theChairwomanoftheEuropeanParlia-ment’s Committeeon Economic andMonetary Affairs (ECON),SharonBowles,andthePresidentoftheEuropeanCentralBank,Jean-ClaudeTrichet.

Throughout2010,the3L3attendedmeetingsoftheEUCouncil’sFinancialServicesCommittee(FSC)andwereinvitedtoattendmostmeetingsoftheEUCouncil’sEco-nomicandFinancialCommittee(EFC)inordertodiscussissuessuchasfinancialmar-ketdevelopments,crisismanagement(e.g.stresstesting)andinternationalregula-torydialogue.

NextstepsGiventhelandmarkinstitutionalchange,namelythecreationofthethreenewEuropean Supervisory Authorities (ESAs), ESMA, EBA and EIOPA, which respec-tivelycame intobeingon1 January2011, the threeESAs’coordination isnowformalised in the new Joint Committee of the ESAs.The first meetings of theBoard of Supervisors of the ESAs were held from 10-12 January 2011 and thefirstmeetingoftheESRBSteeringBoardwasheldon20January2011.TheseniormanagementoftheESAsisexpectedtobeinplacebyJune2011.

13.2 3L3 Task Force on Cross-Sector Risks

Identifyingcross-sectoralriskswillhelpthe3L3Committees,theirmembersandtheEU institutions in ensuring the stability of European financial markets. FollowingtheECOFINCouncilconclusionsinMay2008,theEuropeanCommission’sdecisionsestablishingeachofthe3L3Committees,andtherequesttothe3L3Committeestorespondtofinancialstabilityconcernsofacross-sectoralnature,the3L3Committeessetupa3L3TaskForceonCross-SectoralRisks,whichhasbeentaskedwithenhanc-ingthe3L3Committees’sectoralriskassessmentsbycapturingcross-sectoralissuesandidentifyingcontagionchannels.InApril2010,theTaskForce,whichischairedbyJukkaVesala, Deputy Director General of the Finnish FSA, delivered to the EFC-FST(EconomicandFinancialCommittee–FinancialStabilityTable)thesecondoftwopi-lotreports.

Thesedevelopmentsshow,atanearlystage,the3L3Committees’abilitytocapturecross-sectoralrisksrelevanttotheriskassessmentsoftheCommittees:commonrisksacrosssectors,andespeciallyriskswhicharecontagiousfromonesectortoanotherandendogenousriskswhereregulatoryactioninonesectormayhavesignificantriskimplicationsforanothersector.

Theworkaimsatcapturingcontagionrisksbetweenindividualinstitutionsandsec-torsfromasupervisorycross-sectoralviewpoint,andbringsthemicro-prudentialfo-cusintotheoverallassessmentofthefinancialstability.

ThesecondpilotreportofApril2010dealtwiththefollowingrisks:interdependenceandfeedbackloopsbetweenthefinancialsectorandtherealeconomy;cross-sectorholdingsandexposures;marketsentimentspill-over;andchangesinassetpricesanddeleveraging.

InSeptember2010,the3L3providedtheEFCwithareport.Whilstthereportnotedimprovements in the macro-economic conditions and that successful governmentsupportmeasureshadhadapositiveeffectonfinancialinstitutions, ithighlightedthefollowingrisks:spill-overrisksofsovereigndebtproblemsforfinancialmarketsandinstitutions,risksassociatedwithbanks’fundingposition,anewdeteriorationinassetsmarkets,ashiftand/orchangedshapeoftheyieldcurve,“retailisation”ofcertaincomplexproducts,businessmodelandprofitability-relatedrisks,andfinallybusinessmodelandprofitability-relatedrisks.

NextstepsTheESAswillcontinuetheworkstartedbythe3L3Committeesoncross-sectoralriskidentificationandassessmentundertheJointCommitteeoftheESAsand,togetherwiththesectoralriskassessmentsdonebyeachoftheESAs,willcon-tributetotheoverallassessmentofthesystemicrisk,whichisthesharedrespon-sibilityoftheESAstogetherwiththeESRB.

13.3 Anti-Money Laundering Task Force

The 3L3 Anti-Money LaunderingTask Force (AMLTF) was established in the secondhalf of 2006 by CESR, CEBS and CEIOPS, with the aim of achieving convergence innationalimplementationoftheThirdMoneyLaunderingDirective(3rdMLD)acrossthedifferentsectorsofEuropeanfinancialmarketsandwithaviewtoprovidesuper-visoryinputintoanti-moneylaundering(AML)issues.

Throughout2010,theAMLTFmetfourtimesunderthenewchairmanshipofUldisCerps (Finansinspektionen, Sweden). In the course of 2010, theTask Force investi-gatedsupervisorypracticesrelatedtothe3rdMLDbywayofquestionnairessenttoallitsTaskForcemembersinrelationtoa)BeneficialOwnersandb)SimplifiedDueDiligence(SDD),withaviewtoassessingwhetherthedifferencesinanyimplemen-tationpracticenotedmightresultindifferentoutcomesforAML,anditssupervisionthroughouttheEU.

ReflectingcurrentdevelopmentsinEuropeanAMLlegislationandpractice,withtherecently introduced Payment Services Directive (PSD), the AMLTF also undertook astock-takeexerciseofsupervisorypracticesinrelationtoAgentsofPaymentsServicesInstitutions(PSIs)providingthepaymentservicesofmoneyremittance.

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Furthermore,theAMLTFhasundertakenpreparatoryworkforahome/hostsupervi-soryprotocolbetweeninvolvedAMLsupervisorsofaPSIanditsagentsandbranches.Duringthispreparatorystage,theAMLTFfoundthattheProtocolwouldprovideforapracticalandpragmaticframeworkforinvolvedhomeandhostsupervisorsofaPSItoassistthesupervisionrelatingtotheantimoneylaunderingobligationsunderthe3rdMLDandthePSD.

During2010,AMLTFMembersalsodiscussedtheFinancialActionTaskForce/OECDlistsofnoncooperativeandhighriskjurisdictionspublishedinFebruary2010,andtheirsupervisoryapproachtoSDDandrelianceon3rdparties,vis-à-visthejurisdic-tionsnamedonthesetwoFATFpublishedlists.

NextstepsInlightoftheestablishmentofthethreeESAs,theJointCommitteeoftheESAswillestablishaSub-CommitteeonAntiMoneyLaunderingtotakeoverandfinal-iseallAMLTFworkstreamsinitiatedinthecourseof2010,namely:a) ToassessimplicationsformoneylaunderingriskandAMLsupervision,inre-

spectofdifferencesinsupervisoryimplementationpracticesnotedinthe3rdMoneyLaunderingDirective(basedon2010workonBeneficialOwnersandSimplifiedDueDiligence),andpossiblydevelopguidance;

b) TodevelopasupervisoryprotocolbetweeninvolvedAMLsupervisorsofaPay-mentServicesInstitutionsanditsagentsandbranches;and

c) ToassessimplicationsforAMLsupervision,andpossibledevelopmentofasu-pervisoryprotocol,inrelationtothenew2ndE-moneyDirective.

13.4 3L3 Work on Financial Conglomerates

TheJointCommitteeonFinancialConglomerates(JCFC)metfourtimesin2010un-der thechairmanshipofThomasSchmitz-Lippert (Bafin,Germany)frommid2010,andPatrickBrady(IFRSA,Ireland)untilmid2010.

TheJCFCprovided input to theEuropeanCommission’sproposalsfor thequickre-view of the Financial Conglomerates Directive (FICOD), known as FICOD I, and thefundamentalreviewofthisDirective,FICODIIthroughout2010.Forexample,inJuly2010theJCFCsentalettertotheEuropeanCommissiontoadviseaseamlesstransi-tionfromthecurrentInsuranceGroupsDirectivetowardsSolvencyII,byproposingtoamendthedefinitionofaholdingcompanyintheSolvencyIItextinsothatalsoun-derthenewinsuranceregulationbothsector-specific(bankingandinsurance)super-visionandsupplementarysupervisioncouldbeappliedontheconglomerate’sparententity.OralreportswereprovidedbytheJCFCtotheEFCCattheirtwomeetingsheldin2010.FurthertheJCFCprovidedrecommendationstotheEConOmnibusIinrela-tiontoFinancialConglomeratesupervision.

TheJCFCpublishedandsubmitted itsannual listoffinancialconglomerates,asat1stJune2010,basedon2010yearendfiguresreportedbytheundertakings,sothatMemberStatescouldmeetthereportingrequirementsinArticle4(2)oftheFCD.TheJCFCnotedthattheongoingdynamicsinthefinancialsectorwerereflectedbysev-eralmergersofpreviously identifiedconglomerates,aswellasnewconglomeratescreated,andtherestructuringofexistingconglomeratessuchthattheyarenolongercapturedunderthescopeoftheFICOD.

Furthertoits2009advicetotheEuropeanCommissiononthereviewoftheFICODondefinitions,scopeandinternalcontrolrequirements,andhowtheseareasandtheirimplementationwithintheexistinglegislativeframeworkmayimpactonthefulfil-mentoftheobjectivesoftheFICOD,supervisorsfeltitwasnecessarytoimmediatelystart working on one topic, namely participations, so as to strive for more conver-gencebetweenMemberStates,evenbeforethereviewoftheFICOD.Accordingly,theJCFCestablishedaParticipationsWorkingGrouptoconcentrateon:★Identification of Financial Conglomerates and specifically the to address how to

includeparticipationsinthecalculation(durablelink,indirectparticipations)★When identified, how to include participations in the day-to-day supervision (for

exampleRiskConcentrationandIntra-GroupTransactionsandwhatkindofinfor-mationcouldbereasonableobtainedinthecaseofnon-controlledparticipations)

Bytheendof2010,theJCFC’sParticipationsWorkingGroupprepareddraftguidanceonDurableLinkonhowtoincludeparticipationsinthecalculationswhenidentifyingaFinancialConglomerate.

TheJCFCmonitoredalsotheFinancialConglomeratesdimensionofCEBSandCEIOPSsectorworkonColleges,toensureFICODconsistency.AteachoftheJCFC’s2010ple-narymeetings,JCFCMembersdiscussedtheirpracticalexperienceofdiscussionoftheFICODrequirementswithinacollegeandalsotheSecretariatconductedasurveyamongsttheJCFCmembership.TheJCFCnoted,amongstotherstheirpreferencenottoduplicatesectorcolleges.TheSecretariatconductedananalysisof thestatusofcollegediscussionstodateonFICODrequirements,whichnotedimprovementscouldbemadeasnotallgroupshavecolleges,andthatthosethatdomeet,havevaryingdegreesofdiscussingtheFICODdimensions.AccordinglytheJCFCdrafteditsrecom-mendationsonSupplementaryFICODrequirementsinsupervisorycollegesoffinan-cialconglomeratesthatcouldbeaddedtothealreadyexistingsectoralguidelines.Thesesevenrecommendationswereendorsedandpublishedon21December2010,byCEBSandCEIOPS.Theserecommendationsinclude,amongothers,thesettingup,foreveryfinancialconglomerate,ofaplatformfordiscussingFCDissueswithintheexistingcollegestructure.Theplatformiseitherestablishedatbanking level, forabanking-ledfinancialconglomerateoratinsurancelevel,foraninsurance-ledfinan-cialconglomerate.

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NextstepsThe threeESAswill continue theworkonfinancialconglomerates in the JointCommittee’sSub-CommitteeonFinancialConglomerates,including:●PublicationofthelistofidentifiedFinancialConglomerates,inaccordancewith

thelegalrequirementsfollowingOmnibusIDirective.●Draftguidanceonthe identificationandsupervisionofparticipationswillbe

publishedforconsultation.●CommenceworkonprovidingadvicetotheEConFICODII.●Developtemplatesforcollegesoncross-sectoralaspects.●CommencepreparationofGuidanceandTechnicalStandardsonspecificFICOD

requirements.

13.5 Internal Governance

InJanuary2010,the3L3TaskForceonInternalGovernance,chairedbyGabrielBer-nardinoofthePortugueseInsuranceandPensionsFundsSupervisoryAuthority,pub-lishedareportonaCross-sectoralstock-takeandanalysisofinternalgovernancere-quirementsandsentthistotheEuropeanCommission.Thereportaimedtoidentifyareas,forpossibleharmonisationofthedifferingregulationsofthethreefinancialservicessectors.Thereportidentifiednoareas,ofahighpriority,forharmonisation.Although,forsomeareas,alowormediumprioritywasidentified.ACallforEvidencewaspublishedwiththereport,withtheaimtogetindustries’viewsontheneedforharmonisation.

On9February2010, theEuropeanCommission’sCompanyLaw,CorporateGovern-ance and Financial Crime Unit convened a meeting with representatives of CESR,CEBSandCEIOPStodiscussthe3L3workonInternalGovernanceandalsotheEuro-peanCommission’sworkonCorporateGovernance.

InJune2010,theEuropeanCommissionpublisheditsGreenPaperonCorporateGov-ernanceandRemunerationpolicies.AtthebeginningofSeptember2010,CEBS18andCEIOPSsenttheirrespectivesectorresponsestotheEuropeanCommission.TheEu-ropeanCommissionheldameetingwiththe3L3on16September2010todiscussitsCorporateGovernanceGreenPaperandRemunerationissues,inparticularregardingtheresponsesreceivedfromCEBSandCEIOPS.TheEuropeanCommissionreceivedmorethan200responsestoitsGreenPaper,andinvitedCEBS,CEIOPSandCESRtodiscussmorespecificissuesraisedbyrespondentsandhowtheycouldbedealtwith,withintheproposedregulation.AfurthermeetingwasplannedforJanuary2011.

On13October2010,theEuropeanCommissionpublisheditsGreenPaperonAuditPolicy.The3L3Committeespreparedacommon3L3coverletterfortheirresponsestothisGreenPaper.This3L3coverletterincluded,asanAnnex,moredetailedcommentsfromeachofthe3L3committees.

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NextstepsTheJointCommitteeoftheESAsmayundertakefurtherworkcomparingMiFID,CRDandSolvencyII,inlightoftheEC’sworkoncorporategovernanceandaudit.

13.6 Joint Work on Non-Cooperative Jurisdictions

InordertoassisttheEUpoliticalinstitutionsinpreparingthemeetingsoftheFinancialStabilityBoardandG20heldinthefirsthalfof2010,the3L3CommitteesaskeditsMembersforanupdateontheirexperienceoncooperativejurisdictionswithintheirMembers’regulatory/supervisorycompetencies.The3L3CommitteessummarisedtheresultsthatwereprovidedtotheEFCFinancialStabilityTablemeetingon9April2010.

For theEFC-FSTmeetingon20/21September2010, in linewith the2004politicalrequestoftheEFC,the3L3Committeesfurthersubmittedareportbasedonthe3L3Committeemembers’responsecollectedoverthesummer.Thereportnoteddevelop-mentsaswellasremaining/deepeningissuesthatMembersfromthethreesectorsexperiencedin2010.The3L3CommitteesnotedthatpartoftheG20agendarelatestotaxconcernswhichgobeyondthe3L3supervisorycompetencies,whilstcontinuingtosupportthestrongmomentumintheG20/FSBagendaforreformstorepair,strengthentheresilienceandimprovethefunctioningoffinancialsystemsgoingforward.

Nextsteps:InlightoftheestablishmentofthethreeEuropeanSupervisoryAuthoritiesandasperdecisionoftheSeptember2010EFC,thefutureJointCommittee,willcon-tinuethepracticeofthe3L3Committees,toprovideanannualreporttothepo-litical levelonrelateddevelopmentsofnon-cooperative jurisdictions in theEUfinancialsector.

13.7 3L3 Joint Task Force on Packaged Retail Invest-ment Products (PRIPs)

A3L3TaskForceonPackagedRetailInvestmentProducts(PRIPs)wassetupinFebru-ary2010toformulateacommon3L3positiononthescopeofPRIPsandtheappropri-ateprinciplesforpre-contractualproductdisclosuresandsellingpractices.

TheTaskForcewaschairedbyAnneliTuominen(Finanssivalvonta,Finland)andwascomposedofanequalnumberofrepresentativesfromCESRandCEIOPS,aswellasof experts from CEBS on structured deposits and of observers from the EuropeanCommission.

Fivemeetingswereheldbetween9April2010and10September2010.On6October2010,areportwassubmittedtotheEuropeanCommission,underajoint3L3Chairscoverletter,anditwaspublishedonthewebsitesofthe3L3Committeeson12Oc-tober2010.

TheTaskForcesought,whereverpossible,toformconsensualviewsonthekeyaspectsofPRIPs.However,wherethiswasnotpossible,alternativepositionswereexpressed.

The European Commission published a Consultation Paper on its proposed legalframeworkforPRIPsscopeandproductdisclosureon26November2010.Draftleg-islative proposals on pre-contractual product disclosures for PRIPs are expected inJune2011.LegislativeproposalsregardingsalesofPRIPs,whichwillbeincorporatedinarevisedMiFIDandIMD,arenotexpecteduntillater2011.The3L3Committees,intheirnewformulationsasESAsstandreadytoassistwithanyfurtherpolicyworkbytheEuropeanCommissioninthisarea.

NextstepsTheTaskForcemaytakeupfurtherworkwithintheframeworkoftheJointCom-mittee of the ESAs in the second half of 2011 to eventually provide advice inresponsetotheCommission’slegislativeproposalsonproductdisclosure.

13.8 Fostering Convergence Through 3L3 Training

In2010,the3L3TaskForceontraining,whichbringstogetherseniorrepresentativesfromeachoftheLevel3Committeesandtheirmembers,continuedtofosterconver-genceamongstsupervisorsbyreachingahigherlevelofco-operationoncross-sectortraining.Thesecross-sectorseminarssupplementthesectortrainingseminarswhicheachoftheCommitteesorganises.

Thethreemajorareasofco-operationduring2010included:●organisingcross-sectorseminars,●planningannual3L3TrainingProgramme,and●reviewingthe3L3ManualonTrainingProcesses.

Organising cross-sector seminars:TheTask Force and the 3L3 Secretariats made ajointeffortindeveloping,monitoringandassessmentofthe3L3trainingprogramme.Alongwithotherprojectsofthe3L3Committees,cross-sectortraininghasbenefitedfromasecondyearoffinancialsupportfromtheEuropeanCommissionin2010.

Followingtheanalysisofthelearningoutcomesprovidedinthefeedbackreceivedonthetraining,theTaskForceconcludedthatthefurtherinvolvementoftheSecre-tariatsintheimplementationoftrainingandacloserco-ordinationwiththehostswouldbebeneficialinthefuture.

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Planningtheannual2011TrainingProgramme:The3L3Secretariatsco-operatedinthe development of a common questionnaire aimed at assessing the demand fortrainingneedsin2011andtoidentifyvolunteerstohostandorganiseseminars.Forthe first time, the online questionnaire facilitated a co-ordinated response by sin-gleregulatorswhoareMembersofthe3L3Committees.Thefeedbackprovidedwasused by theTask Force as a basis for planning the 3L3 training programme of thefollowingyear.

Reviewing the 3L3 Manual onTraining Processes: Given the transformation of the3L3intoESAsasof1January2011,theTaskForcerevieweditsmanualontraining,developedin2009, inordertoreflectthebudgetaryproceduresoftheESAsandtomakeitmoreuserfriendly.TheupdatedESAsManualonTrainingwillbefinalisedandpublishedin2011.

The3L3Committeesmaintainedthenumberofcross-sectoralseminarsin2010: The3L3Committeesdevelopedacross-sectortrainingprogrammetoensurecross-sectorconvergence,togetherwiththeessentialsupportofthememberswhovolunteeredinhostingandorganisingseminars

The3L3trainingprogrammefor2010includedthefollowingcross-sectorseminars

Theeffortdevoted to trainstaffofEUsupervisoryandregulatoryauthoritiesonacross-sectorbasisduring2010allowedforthetrainingofover350supervisors,whichmeansfurtherstrengtheningofourcommonsupervisoryculture.

NextstepsTheTaskForce,within theframeworkof the JointCommitteeof theESAs,willcontinuethetrainingprogrammefor2011andwillfinalisetheESAs’ManualonTraining,aswellasstrengthencooperationinsupervisorytraining.

No. Nameofseminar Date&Location HostNumberof

participants

01 CorporateGovernance 26February,Lisbon

CNVM 35

02 AssessmentofITsystemsandapplica-tionsinfinancialinstitutions

1–3March,Eltville(Frankfurt)

BuBa 29

03 NegotiatingskillsforEuropeanSupervisors

4–5March,Eltville

BuBa(ESE) 14

04 SeminaronRiskManagementforFinancialConglomerates

18–19March,Amsterdam

DNB&Duisenberg

SchoolofFinance

28

05 NegotiatingskillsforEuropeanSupervisors

6–7May,Eltville BuBa(ESE) 10

06 AssessmentofITsystemsandapplica-tionsinfinancialinstitutions

9–11June,Eltville BuBa 28

07 UnderstandingtheimpactofLehman’sdefaultonmarketparticipants

17–18June,Paris AMF 26

08 InternalModelvalidation–BankingandInsurancesector

24–25June,Rome Bancad’Italia&ISVAP

47

09 NegotiatingskillsforEuropeanSupervisors

15–16July,Eltville BuBa(ESE) 12

10 NegotiatingskillsforEuropeanSupervisors

27–28September,Eltville

BuBa(ESE) 9

11 Clearingandsettlement–recentdevelopmentsandchallenges

29–30September,Frankfurt

BuBa 24

12 NegotiatingskillsforEuropeanSupervisors

21–22October,Eltville

BuBa(ESE) 9

13 ThenewEuropeanSystemofFinancialSupervision

6–7December,Paris

CESRSecretariat

55

14 SupervisoryColleges 9–10December,Berlin

BaFin&CEIOPS

30

Total 323

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EIOPA 2011 WORk PROgRAmmE

14.1 Introduction

ThisworkprogrammarksthestartoftheworkofEIOPA.Theobjectivesset inthisworkplanarebasedontheRegulationestablishingEIOPA,asithasbeenapprovedbytheEuropeanParliamenton22September2010andontheongoingworkprogramofCEIOPS,whichwillbecontinuedunderEIOPA.

The transition from CEIOPS to EIOPA is not a process that will be completed on1 January 2011. Although EIOPA will be operational and up-and-running from thefirstday,alotoflessurgentproceduresandprocessesstillhavetobeincorporatedduring thefirstmonths,andsomeevenup till theendof theyear,given theirna-ture.Thistransition,inthemiddleoftheongoingandimportantworkthatCEIOPS/EIOPAisdoingontheareaofSolvencyIIandpensions,iscreatingextrachallengesforEIOPAtokeeptrackwithalltheambitiousgoalsthatareset.Tokeepitssuccessgo-ing,CEIOPS/EIOPAhasreliedonasmall,butdedicatedteamtoreachitsgoals.During2010,thisteamhassteadilygrown,from17inJanuaryto27inDecember.Andfur-thergrowthisforeseentoaround50attheendof2011asthenewtasksandrespon-sibilitiesundertheRegulationwillpushEIOPAfurther.

Despite thisgradualgrowth,EIOPAcannotfrom thestartaccomplishall the tasksandresponsibilitiesassetintheRegulationtoitsfullextent.Forapartthisischan-neledbecausemanyofthenewresponsibilitiesarelinkedtoSolvencyIIwhichwillcomeintoforceinJanuary2013.ForanotheritmeansthatprioritiesneedtobesetandthatcertainelementsofworkofEIOPAwilldevelopgraduallyasourteamwillcontinuetodevelop.

For2011,themainprioritiesare:1. Datacollectionandprocessing2. Consumerprotection/FinancialActivities(chapter5)3. Cross-bordercrisismanagementandsolutionandcolleges(chapter6)

TheseprioritiesrepresenttheongoingworkfromCEIOPStoEIOPAinSolvencyIIandpensions,thestrengtheningofexistingcooperationwithourMembersand3L3col-leagues incolleges,crisissolutionanddatacollectionandfosteringchannelswithconsumers(representativeorganizations)andwithnewstakeholdersliketheESRB.

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Non-bindingLevel3guidelinesinvariousareasarebeingenvisagedandwillbefur-ther prepared by EIOPA in 2011 to support the convergent application of the newrules.TheultimateadoptiondatebyEIOPAwillbeMarch2012,intimeforMemberStates todecidewhether toapply theguidelinesor toexpress their intentionandrationalefornotadopting(comply-orexplain).

ThedraftingoftechnicalstandardsandLevel3guidelinesarebeingprioritisedaccord-ingtowhethertheyareconsideredessentialbeforetheimplementationofSolvencyII.Whereappropriate,EIOPAwillbeassessingthecostsandbenefitsofitsproposedtechnicalstandardsandguidelinesasanongoingrequirementforbetterregulation.IntheabsenceofpubliclyavailableLevel2measuresuntilJune2011,CEIOPSwillnotbeabletopubliclyconsultonLevel3guidelines,orontechnicalstandardsuntilthen.Therefore, informal pre-consultations will be held with selected stakeholders thathavebeenconsultedbytheCommissionduringtheconsultationonQIS5technicalspecificationsandthediscussionontheLevel2measures.

Solvencycapitalrequirements,ownfundsandtechnicalprovisionsPillar1elementsregardingcapitalrequirements,ownfundsandthecalculationoftechnicalprovisionswillbefine-tunedusingtheresultsofQIS5.

IntheframeofQIS5,CEIOPSwillhavecollecteddatatorefinethecalibrationforthenon-lifeandnon-SLThealthriskmodule. AJointWorkingGroupconsistingofrep-resentativesofAMICE,GroupeConsultatif,CEAandCROforumaswellasobserversfromtheEuropeanCommissionhasbeensetupbyCEIOPStodiscussthemostap-propriatecalibrationmethods.

FurtherworkonspecificissuesarisingfromQIS5,suchasthestandardisedscenariosforcatastropheriskinthestandardformulawillbeundertaken.

ActuarialguidelinesarebeingdevelopedtoassisttheactuarialfunctionunderSol-vencyIItocalcuationthebestestimateinaconvergentmanner.

AsQIS5istestingapproachesforgrandfatheringownfundselements,EIOPAwilllookintotheimpactandfeasibilityofgrandfatheringinthisarea.

InternalmodelsWithregardtointernalmodels,in2011,CEIOPSwillissuespecificLevel3guidelinesinareasthatitconsidersessentialforasmoothimplementationoftheprovisionsfortheinternalmodelsapprovalsetoutinSolvencyII.

CEIOPS’taskforceonpre-applicationwillcontinuetocarryoutinitiativesthatshouldcontributetoenhancesupervisoryconvergenceandconsistencyinthepre-applicationprocess,bothintermsofprocessesandoutcomes.Tothisend,CEIOPSwillorganisespecificinformalmeetingstoenhanceexperienceandproblemsfacedbySupervisory

ThislistdoesnotrepresentalltheworkthatwillbecarriedoutatEIOPA.EIOPAwillcontinuetheworkthathassuccessfullybeendoneonsupervisoryconvergenceandculture,byofferingawellestablishedtrainingprogram.For2011theaimistomorecloselyalignthistrainingprogramtotheneedsofsupervisors“outinthefield”andtotransferpolicyknowledgeintooperationaltools.Thedetailsaredescribedinchapter14.8.AlsoEIOPAwilldevelopnewinitiativesforconductingpeerreviewsbasedonthenewtasksoutlinedintheEIOPARegulationandbuildingontheexperiencefromthefirstpeerreviewexercisefinalisedin2010.Thedetailsaredescribedinchapter14.8.2.

Furtherareasofworkwillbetheworkdoneonaccounting, internationalrelationsandtheongoingworkonTransition,describedinChapterX.

14.2 Insurance

14.2.1SolvencyIITheimplementationdateoftheSolvencyIIframework(31December2012)iscom-ingcloserandMemberStatesaregettingpreparedtoimplementthenewframworkintheirnationallaw.EIOPAiscommittedtofurtherdevelopthefutureregime,andatthesametimeispreparingthenecessarytoolsandprocessestoensureasmoothtransition.

TheSolvencyIIworkplanfor2011willbecharacterisedbyaheavyregulatoryworkload at a time where the implementation efforts are increasing among MemberStatesandindustry.Coordinationbetweenthedifferentworkstreamsisofkeyim-portancetoensurethefinalconsistencyoftheLevel2measures,guidelinesandtech-nicalstandards.

Theresultsofthelastmajorquantitativeimpactstudybeforeimplementation,QIS5,willbeavailableinthefirstquarterof2011,andwillhelpidentifyingthemajorre-mainingregulatoryissuesthatneedtobesolvedbeforetheimplementation.

TheEuropeanCommissionisaimingtomakeaproposalfortheLevel2implementingmeasuresinJune2011.EIOPAwillfurthercontributewherenecessaryonkeyissuesinthefinalisationoftheLevel2proposalsandfinalmeasures.

TheprocessforEIOPA’sdeliverablesontechnicalstandardsandLevel3guidelinesisinfluencedbythetimingoftheproposalsandadoptionoftheLevel2measures,aswellastheadoptionoftheOmnibus2Directive,whichwillamendtheSolvencyIIDirectiveinrespectofthepowersofEIOPA.

ThedraftOmnibus2DirectiveforeseesthatEIOPAwillberequiredtodraftbindingtechnicalstandardsinvariousareasbyDecember201119.Thiswillcoveralargepartoftheworkprogrammefor2011.

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EIOPAwillcontinuetoconsultstakeholdersontheoverallreportingrequirementsinthecourseof2011.Duetotheimportanceoftheworkinthisareaandtheexpectedchallenges for the implementation, EIOPA considers this is one of the key areas inwhichstakeholdersneedtobeinvolved,andwherethepreparatoryworkfortheim-plementation needs to start early.Therefore, EIOPA aims to stabilize the reportingtemplatesassoonaspossible.

Authoritiesduringthepre-applicationprocessand/orthereviewofinternalmodels,andad-hoctraininginitiativeswillbecarriedout.

ReportinganddisclosureTheaimoftheworkonreportinganddisclosureistodevelopaharmonisedapproachthrough the introduction of common reporting templates and formats. Followinginformalconsultationonthedraftreportingtemplateswithselectedstakeholders,

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14.2.3EquivalenceThe2011CEIOPSdeliverablesforequivalencewillbedrivenbythe29October2010CallforAdvicefromtheEuropeanCommission20.Asperthis latestrequest,CEIOPSwillneed toproducebyendSeptember2011 its fullyconsulteduponadviceas toequivalenceassessmentsof theSwissandBermudiansupervisorysystemforrein-surance,groupsolvencycalculationandgroupsupervisionwhiletheJapanesesuper-visoryregimewillbeassessedonlyforreinsurancesupervisionequivalence.

BeginningDecember2010withCEIOPSwillinitiatesimultaneouslyitsassessmentsforeach3rdcountryindicatedbytheEuropeanCommission.CEIOPSassessmentswillbeundertakensimultaneouslybydedicatedassessmentteamswhichwillhavelessthanapproximately40weekstoproducetheirreports.

Thismakes theprocesshighlyresourcedemandingasall theseassessment teamswill need to have the necessary expertise, knowledge, supervisory experience andsize tomatch theextentof theassessmentaswellas thecomplexityof the thirdcountrysupervisorysystem.CEIOPSSecretariatandthenEIOPAwillfullysupporttheprocessbyallocatingresourcesandensuringcoordinationbetweentheassessmentteams.

ForeachassessmentCEIOPSwillensurefulltransparencyoftheprocesswith:★acallforevidenceasthefirststepoftheprojectand★apublicconsultationonfindings,beforesubmissionofitsadvicetotheEuropean

Commission.

Throughoutthesecondpartof2011,CEIOPSwillreviewandadaptitscurrentmeth-odologyonequivalenceassessments21andissueitasLevel3guidancetoEUgroup/individual supervisors. This will allow EU group/individual supervisors to pursueequivalence assessments in a consistent manner and will ultimately lead to en-hancedsupervisoryconvergenceonthematter.

TheLevel3methodologyforgroup/individualsupervisorswillincorporateallrelevantregulatorydevelopmentsfrom the1sthalfof2011aswellaspracticalexperiencefromCEIOPSinitial3rdcountryassessments.ItisexpectedthatthisLevel3guidancewillbeavailableforsupervisorsusetowardstheendof2011.

14.3 Occupational Pensions

The European Commission expects to initiate a review of the IORP Directive soonaftertheclosingdatefortheirconsultationontheGreenpaperonpensionson15November.RespondingtotheEuropeanCommission’sCallsforAdvicetocontributetothereviewandtoarelatedimpactassessmentislikelytoformthebiggestandmosthighprofilepartoftheEIOPA’sworkonoccupationalpensionsin2011.

GovernanceLevel3guidelinesonthesystemofgovernanceandORSAwillbethemajordeliver-ables expected for 2011 in this area.The guidelines on the system of governancewillcovertheriskmanagementsystemandtheinternalcontrolsystem,aswellasrequirementswithregardtofitandproper,outsourcingandthefourfunctionsintheinsuranceundertaking(riskmanagement,compliance, internalauditandactuarialfunction).

SupervisoryreviewprocessTheaimoftherequirementsonthesupervisoryreviewprocess(SRP)istobuildthegroundforaconsistentapproachtosupervisionacrosstheEUandconvergenceinsupervisorypractices.

Level3guidelinesonSRPwillcover theobjectivesandgeneralprinciplesofsuper-vision,theriskassessmentframeworkandprocessofsupervision,includingreview,supervisorypowersandactions.

Guidelinesonthetransparencyandaccountabilityofsupervisorswillbedevelopedinthecourseof2011,too.

GroupissuesOn the basis of the existing guidelines, as well as cross-sectoral and internationaldevelopments,CEIOPSwilldeveloptheguidelinesandtoolsthatarenecessarytoen-sureaproperfunctioningofsupervisorycollegesunderSolvencyII.

Level3guidelinesonintra-grouptransactionsandriskconcentrationwillbedevel-oppedtoprovideacommonbasisforallgroupsandsupervisorsinthisarea.

GroupissueswithrespecttoORSA,internalmodelsorreportingwillbedevelopedatthesametimeasthesolorequirementsinthoseareas.

Following the results of QIS5, guidelines for calculating the solvency position ofgroupswillbedeveloppedintheareaswheretheLevel1andLevel2arenotsuffi-cientlydetailed.

14.2.2GroupissuesunderthecurrentInsuranceGroupsDirectiveThesupervisionofcross-borderinsurancegroupsunderthecurrentregulatoryframe-workneedstobefurtherenhancedin2011.Tominimizethesupervisoryburdenoninsurance groups and to be better prepared for times of crisis, in 2011, EIOPA willworktowardstheconvergenceofsupervisorypracticesandsupervisoryco-operation.

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Atthetimeofwriting,neitherthecontentoftheCallforAdvicenorthetimetablefordeliveryhavebeenconfirmedbytheCommission.However,CEIOPSstandsreadytoadaptitsresourcesanddrawupdetailedplansforatimelydeliveryofitsadviceassoonastheinformationbecomesavailable.

Anumberofprojectsstartedwillbefinalisedin2011.Theseare:“Reportingtosuper-visoryauthorities”tobecompletedinQ1andaDCfocusedprojectwhichwillmaptheriskstomembersofDCschemes,includingtheanalysisofcertainselectedrisks,tobecompletedinQ3.

EIOPAwillalsopublisha2011updatetoits“ReportonMarketDevelopments”whichtracksoverallactivityinthemarketforEuropeancross-borderoccupationalpensionprovisionsince2007.

InDecember2009CEIOPSManagingBoardinstructedCEIOPStoundertakeaseper-atepieceofworkonPRIPsandpensions,whileshadowingthedevelopmentsinthe3L3TaskForceonnon-pensionPRIPS.The3L3TaskForcereportwascompletedinOc-tober2010.CEIOPSprojectwillcontinuein2011, takingintoaccounttheoutcomeof thePensionsGreenpaperconsultationandthescopeof thereviewof the IORPDirective.

14.4 Financial stability

InlinewithEIOPA’smandatethetasksinrelationtofinancialstabilityaimatidentify-ing,atanearlystage,trends,potentialrisksandvulnerabilitiesstemmingfromthemicro-prudentiallevelandtoinform,wherenecessary,theappropriateinstitutions.EIOPAwillmonitorstructuraldevelopmentsinthesectorsaswellasrisksrelatedtospecificproductswhererelevant.Furthermore,ariskdashboardwillbedevelopedincooperationwiththeESRBandotherESAs.Alsoaharmonised,pan-Europeanstresstestfortheinsurancesectorwillbecarriedout.ThestresstestwillbedevelopedincooperationwiththeESRBandaimatusingcommonmethodologiesforassessingtheeffectofeconomicscenariosonaninstitutions’financialposition.

AsinpreviousyearsEIOPAwilldeliver,intheAutumnof2011,anannualassessmentofsectordevelopmentshighlightingimplicationsforfinancialstability,withapro-visionalreportintheSpringof2011outliningmainmarkettrendssincetheendof2010.EIOPAwillreportregularlyonfinancialconditionsandfinancialstabilityinthe(re)insuranceandoccupationalpensionssectorsintheEuropeanUniontotheEuro-peanEconomicandFinancialCommittee(EFC)–FinancialStabilityTable.

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●Insuranceintermediariesplayacentralroleinthedistributionandsellingofinsur-anceproducts.CEIOPSprovidedtheCommissionwithdraftAdviceontherevisionoftheInsuranceMediationDirectiveinNovember2010.EIOPAwillcontinuetopro-videassistancetotheEuropeanCommission,whererequested,withitslegislativeproposaltorevisetheInsuranceMediationDirective(IMD),whichisexpectedattheendof2011.

●EIOPAwillalsocontinuetoprovideinput intotheEuropeanCommission’spolicy-makingwithregardstoInsuranceGuaranteeSchemes(IGS).Followingthepublica-tionofaWhitePaper inJuly2010,CEIOPSprovideddetailed input intotheCom-mission’sconsultation.EIOPAwillcontinueinasimilarveinin2011asandwhentheEuropeanCommissionpublishesadraftDirectivetoensurethatIGSexistinallMemberStatesandthattheycomplywithaminimumsetofdesignfeatures.

Asever,intakingalltheseinitiativesandanyfurtherwork-streamsrelatingtocon-sumer protection forward, EIOPA will seek close cooperation with its StakeholderGroups.

14.6 Cross-border crisis management and solution and colleges

14.6.1CrossbordercrisismanagementTheRegulationclearlystatestheexpectationsforthenewsupervisorybodies:“TheAuthorityshouldbeabletorequirenationalsupervisoryauthoritiestotakespecificactiontoremedyanemergencysituation.”(recital20a)

EIOPAshouldthereforebepreparedtotakeactionwhenanemergencysituationarises,from thefirstdayon.BecauseEIOPAwillberelativelysmallat thestart, thisworkshallbeorganisedonaprojectmanagementbasis,wherebycoordinationwillberunbyEIOPA’sSecretariatwherebyMemberssupplyinputtosetupacrisismanagementsystem.

Workinthisareaalsorequiresahighlevelofcooperationbetweenthe3EuropeanSupervisoryAuthorities,theESRB,CouncilandEuropeanCommission.Jointworkonthisareahasalreadystarted.

Inco-operationwiththebankingandsecuritiessupervisors,in2011CEIOPSwillcon-tinuetomonitorcontagionrisks,suchasfeedbackloopsbetweenthefinancialsectorandtherealeconomy;cross-sectorholdingsandexposures;marketconfidence;andchangesinproducts,assetpricesanddeleveraging,betweenthedifferentsectorsaswellaswithinfinancialconglomeratesThefindingswillbereportedinthecontextofthejointthreeLevel3workoncross-sectorriskstofinancialstabilityinEurope.

EIOPAwillfurtherdevelopitsdatabaseofcurrentandhistoricaldataforoccupationalpensionfunds,insuranceandreinsuranceundertakingsintheEuropeanUnion,gath-eredinthecontextofEIOPA’sFinancialStabilityReports.

LookingforwardtotheintroductionofSolvencyII,EIOPAwillhaveregardtothatdatatobecollectedforthepurposesofsinglereportingstandards,duetocomeintoforcein2012,also includesasmuchdataaspossiblerequiredforfinancialstabilitypur-posesincludingthoseofESRB.

FollowingthenewregulationonbothEIOPAandESRBaframeworkforexchangeofinformationwillbeestablishedincooperationwithESRBandotherESAs.

14.5 Consumer protection

EIOPAwillbetakingonsignificantnewpowersandtasks inthefieldofconsumerprotectionandfinancialactivitiesunderitsempoweringRegulation,whichpresentinterestingnewchallengesandopportunities.LiketheotherEuropeanSupervisoryAuthorities–ESMAandEBA,EIOPAwill invariablyneedtimetocomefullytogripswiththesenewtasksandpowers.

Thetasksincludeanalysingconsumertrends,reviewingfinancialliteracyinitiatives,developing industry training standards, contributing to common disclosure rules,monitoringexisting/newfinancialactivities,establishingaCommitteeonFinancialInnovation and temporarily prohibiting/restricting certain financial activities22. Astructuredprocessforputtingthesenewtasksintoeffectwillbeputintoplaceoverthecomingmonths.

Inaddition,EIOPAwillcontinuetoprovideassistancetotheCommissionwithexist-ingpolicyinitiatives:●Consumersshouldfeelconfidentandempoweredtomaketherightchoiceswhen

purchasingfinancialproductssuchasinvestment-basedinsurance.Inthisrespect,CEIOPSMemberscontributedtoa3L3TaskForcereportonPackagedRetailInvest-mentProducts(PRIPs),whichwassubmittedtotheCommissionon6October2010.It ispossible thatEIOPAwill takeupfurtherwork in thisarea in2011,under theaegisoftheJointCommitteeoftheESAs,oncetheCommissionhaspublishedleg-islativeproposalsonPRIPs.

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14.7 Colleges

EIOPA’sroleinCollegeswillbedistinctivelydifferentthanthemoresupportingroleCEIOPShad.Recital22oftheRegulationstates:

“TheAuthorityshouldcontributetopromotingandmonitoringtheefficient,effec-tive and consistent functioning of the Colleges of Supervisors and in that respecthavealeadingroleinensuringaconsistentandcoherentfunctioningofsupervisorycollegesforcross-borderinstitutionsacrosstheUnion.ItshouldthereforehavefullparticipationrightsinCollegesofSupervisorswithaviewtostreamliningthefunc-tioning of and the information exchange process in colleges and to foster conver-genceandconsistencyacrosscollegesintheapplicationofEuropeanUnionlaw.”

Startinginthesecondquarterof2011EIOPAstaffwillactivelyparticipateasmem-bers inCollegemeetings.ThisworkwillalsofeedintoSolvencyIIwork-streamsonsupervisoryCollegesbyclarifying,strengtheningandstreamliningtheroleandfunc-tioningofthecurrentColleges.

EIOPA will work on the implementation of a common IT tool for the exchange ofinformationwithinthecurrentCollegesandthefutureCollegesofSupervisors,bothinnormalandcrisistimes,withtheaimtohavethetoolreadybybeginningof2012.

14.8 Supervisory culture, convergence and cooperation

14.8.1SupervisorycultureThenewRegulationestablishingEIOPA(Article14)stresses the importanceof theCommittee’sroleinthedevelopmentofcommonsupervisorycultureintheEuropeanUnionthroughfacilitatingtechnicaltrainingandtheexchangeofstafftobuildcom-monsupervisoryskillsandapproaches.

Trainingplaysakeyroleinthedevelopmentofcommonsupervisorypracticesinthefieldofinsurance,reinsuranceandoccupationalpensionsanditisoneofthemaintoolsforachievingacommonsupervisoryculture.

The topics covered in the trainings are in line with the work developed by CEIOPSWorkingGroupsandCommittees,whereSolvencyIIisoneofthemaindrivers,followedbyFinancialStability,OccupationalPensions,ConsumerProtectionandConvergence.

UnderSolvencyII,giventheongoingdevelopmentoftheL2measures,mostofthetrainingscarriedoutuntilrecentwerefocusingonanupdateoftheworkinprogress.TheimplementationofSolvencyIIbyend2012willbefollowedbyashiftfromregu-lationtosupervision.Theaimforthefuturetrainingsistotargetoperationalsupervi-sorsandtopreparethembetterfortheSupervisionunderSolvencyII,byintroducingapracticalapproachasthepreferredmethodologyoftraining.

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14.9 Further areas of work

14.9.1AccountingAsinthepast,EIOPAwillcontinuetofollowdevelopmentsintheEuropeanaccount-ingenvironment,especiallybyfollowingtheworkof,andprovidinginputto,theEu-ropeanFinancialReportingAdvisoryGroup(EFRAG)inthecontextoftheapplicationofInternationalFinancialReportingStandard(IFRS)intheEuropeanUnion.EIOPAwillcontinuetofollowtheIASB’sagendacloselyandprovideinputinareasaffectingin-suranceand/oroccupationalpensions.

14.9.2InternationalrelationsIntheEuropeanSystemofFinancialSupervision,thenewEuropeanSupervisoryAu-thoritieswillhaveagreaterinternationalrolethanthecurrentLevel3Committees.AccordingtotheESAregulation,giventheglobalisationoffinancialservicesandtheincreasedimportanceofinternationalstandards,ESAsshouldfosterthedialogueandcooperationwithsupervisorsoutsidetheUnion.

Combined with the power of the ESAs to draft regulatory standards to which theEuropeanCommissioncangivebindinglegaleffect,EIOPAwillseekgreaterrepresen-tationinrelevantinternationalorganisationsinordertorealiseitsstandardsettingroleininsuranceandpensions.Atthesametime,EIOPAwillcontinuetodevelopitsinternationalrelationsbyholdingregulatorydialoguesandmaintainingaclosecon-tactwiththirdcountriesincludingtheUS,China,JapanandLatin-America.

Equally,EIOPAwillassistinpreparingequivalencedecisionspertainingtosupervisoryregimesinthirdcountries.CEIOPSworkonpreparingtheequivalenceassessmentsis likelytoaddafurthermomentumtotheregulatorydialogues,bringingforwarddiscussionsonspecificaspectsofglobalstandards.

14.9.3TransitionAnumberofspecificproceduresneedtobeimplementedinthecourseof2011 toenableEIOPAtobecompliantwithCommissionrequirementsforEuropeanAgencies.ThisrelatestoanumberofInternalcontrolstandardstomeasure,steerandcontroltheeffectiveness,abilityandintegrityoftheorganization.InthetableinannexIasummaryoftheinternalcontrolsandplannedimplementationisset.

Furthermore, staff growth will have an impact on the organization, as its size willalmostdoubleduring2011,givingchallengestoincorporatenewcomersintheexist-ingcultureandvaluesofEIOPAwhileatthesametimegivingroomforgrowthandopeningnewareasofexpertiseintheorganization.ThefurtherdevelopmentofHRpoliciesandpracticeswithintheorganizationisparamountfor thesuccessof thistransition.

ThemainfindingsofthequestionnaireonthePreparednessofInsuranceSupervisorstoImplementSolvencyIIconductedinJune2010haveshownthattrainingplaysamajorroleinspreadingtheSolvencyIIculturewithintheorganisations.Thisshowsthe importanceofcommonsupervisoryculture linked to the trainingatEuropeanlevel,whichnotonlycomplementsbutalsoenhancestrainingatnationallevel.

Followingprioritiescanbeidentifiedinthisarea:●InlinewiththedevelopmentsfortrainingunderEIOPA,theaimforthefuturetrain-

ingsistotargetoperationalsupervisorsandtopreparethembetterforsupervisionunderSolvencyII,byintroducingapracticalapproachasthepreferredmethodologyoftraining.

●Training will focus on the difference between the new and the old supervisoryframeworkinordertoallowsupervisorstofocusonthenewrequirements.

●Othergeneraltoolswillbedeveloped:awebsite-basedlibrary(mainlyonSolvencyII, but also from other areas); case-studies as an ongoing requirement for work-inggroupswhendevelopingregulatorymeasures; thepossibilityformemberstorequest ad hoc training on specific areas (such as Solvency II internal modellingframework; assessment of the (group) internal model during the pre-applicationprocess)ortohosttherepetitionofastandardseminar;exchangingquestionsandanswersbetweenSolvencyIIimplementationprojectmanagersthroughtheEIOPAmembersareawebsite,etc.

CEIOPSexpectstorunthefollowingtrainingeventsin2011:●14sectorseminars,including1–2adhoctrainingsorrepetitionsofstandardseminars●3cross-sectorseminars●2publicevents:thePublicHearingonQIS5andtheEIOPAConference

Asinpreviousyears,thetrainingprogrammewilldrawheavilyonthesupportfromCEIOPSMembersandworkinggroupexperts,incoordinationwiththeSecretariatstaff.

In the context of its work on developing common supervisory culture, CEIOPS be-lievesintheimportanceofstaffexchangesintheformofstudyvisitsandsecond-mentsamongsupervisors.CEIOPSsupervisoryculturewebpagewasre-designedin2010.Thenew,friendlierpageincorporatesthelatestITimprovementstofacilitateinteractionsbetweenCEIOPSanditsMembersandamongMembersthemselvesonmattersrelatingtotrainingandtheexchangeofstaff.

14.8.2SupervisoryPracticesReviewPanelTheRegulationonEIOPAprovidesfornewspecificpeerreviewtaskswhichtheRe-viewPanelwillstartimplementingin2011.Thereforebymid2011theReviewPanelwillfinaliseaprioritizationexercisethroughanalysisandplanningactivities,intend-edtolaythefoundationfortheimplementationofthetasksproposedbytheEIOPARegulation.Byend2011,theReviewPanelwillstartimplementingthepeerreviewtasksofhighestpriority.

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AnnExES

A 2: Financial statements

Income and Expense Account

Actual2009Euro

Actual2010Euro

Budget2010Euro

available 2010Euro

● Revenues Membershipfees,gross 2.890.334,00 4.183.000,00 4.183.000,00 FundingEuropeanCommission 166.666,00 1.100.000,00 1.100.000,00 Rebatetomembers -280.801,85 0,00 0,00 Membershipfees,net 2.776.198,15 5.283.000,00 5.283.000,00 Interestincome 22,074.18 6.283,20 0,00 Releaseofprioryearaccruedexpense 19.548,01 0,00 0,00 OtherIncome 169,70 12.828,80 0,00 Total revenues � 2.817.990,04 � 5.302.112,00 � 5.302.112,00

● Current expense Salariesandwages � 1.432.324,04 � 2.038.697,51 � 2.416.000,00 � 377.302,49 Rentalexpense � 330.895,47 � 496.110,43 � 495.000,00 � -1.110,43 Travellingandentertainment � 138.573,81 � 175.252,09 � 201.500,00 � 26.247,91 Officesupplies � 23.380,10 � 73.787,15 � 64.500,00 � -9.287,15 Organisationandmeetings � 268.979,74 � 137.760,55 � 210.400,00 � 72.639,45 Sectoralandcross-sectoralseminars � - � 169.659,42 � 168.000,00 � -1.659,42 Telecommunicationexpense � 33.361,84 � 58.160,31 � 54.800,00 � -3.360,31 Deliveryandcommunication � 5.826,85 � 8.056,89 � 7.800,00 � -256,89 Printing � 63.862,00 � 125.598,97 � 65.000,00 � -60.598,97 EDPinstallationandmaintenance � 107.049,15 � 167.994,65 � 121.000,00 � -46.994,65 Website � 61.843,44 � 287.382,35 � 266.000,00 � -21.382,35 Professionalfees � 91.522,91 � 133.093,39 � 108.000,00 � -25.093,39 Miscellaneousexpense � 54.148,73 � 6.613,93 � 5.000,00 � 1.386,07 Total expense � 2.611.768,08 � 3.875.167,64 � 4.183.000,00 � 307.832,36● Result for the year (ordinary business) � 206.221,96 � 1.426.944,36 � 1.100.000,00

Retainedearningsbeginningofyear 789.535,47 995.757,43 Retained earnings at end of year � 995.757,43 � 2.422.701,79

● Analysis of Assets and Liabilities 31.12.2009 31.12.2010 CashandBankAccounts � 2.379.459,38 � 2.854.696,80 Leaseguaranteedeposit � 95.447,43 � 146.029,71 Membershipfeereceivables � 0,00 � 0,00 Wagetaxandsocialsecurityreceivables

duefromsecondingauthorities� 138.038,48 � 114.357,09

ReceivableEuropeanCommissionfunding

� 116.000,00 � 622.772,30

Otherreceivables � 9.493,37 � 41.862,86 Prepaidexpenses � 7.184,75 � 9.164,77 Total assets � 2.745.623,41 � 3.788.883,53● Less: Liabilities and Accrued Expense Accountspayables 97.219,92 82.844,29 Prepaidmembershipfee 1.237.225,36 663.457,35 Payrollliabilitiesduetoseconding

authorities 346.887,33 366.812,50

Accruedexpense 40.025,60 186.224,35 Wagetaxliabilities 28.507,77 66.843,25 Total liabilities � 1.749.865,98 � 1.366.181,74● Total committee members‘ equity � 995.757,43 � 2.422.701,79

EuropeanCommissionmaytakelegalactionagainstMemberStatessuspectedofbreachofCommunityLaw.

Level 1

EuropeanCommissionadoptsformalproposalforDirective/Regulationafterafullconsultationprocess(includingadvicefromCEIOPS).

Level 2

EuropeanCommission,afterconsultingtheEIOPC,requestsadvicefromCEIOPSontechnicalimplementingmeasures.

Level 3

CEIOPSworksonrecommendations,guidelinesandstandards(onareasnotcoveredbyEUlegislation),peerreview,andcomparessupervisory

practicestoenhancetheirconvergence.

Level 4

EuropeanCommissionchecksMemberStates’compliancewithEUlegislation

CEIOPSpreparesmeasuresinconsultationwithmarketparticipants,end-usersandconsumers,andsubmitsthemtoEuropeanCommission.

EuropeanCommissionexaminesthemeasuresandmakesaproposaltotheEIOPC.

EIOPCvotesonproposal

EuropeanCommissionadoptsmeasures

AgreementonframeworkprinciplesanddefinitionofimplementingpowersinDirective/Regulation.

European Parliament

Keptfullyinformedandcan

adoptaResolutionifm

easuresexceedim

plementingpow

ers

European Parliament Council

A 1: CEIOPS role in the Lamfalussy procedure

Lamfalussy-modelfromtheperspectiveofCEIOPS

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A 3: List of CEIOPS Members and Observers

Members

AustriaFinanzmarktaufsichtsbehörde(FMA)Otto-Wagner-Platz51090WienAustriaTel:+43124959-0Fax:+43124959-6099www.fma.gv.at

BelgiumBanking,FinanceandInsuranceCommission(CBFA)RueduCongrès–Congresstraat,12–141000BrusselsBelgiumTel:+3222205211Fax:+3222205890www.cbfa.be

BulgariaFinancialSupervisionCommission33,SharPlaninaStreet1303SofiaBulgariaTel:+35929404999Fax:+35928294324www.fsc.bg

CyprusInsuranceCompaniesControlService(ICCS)P.O.Box233641682NicosiaCyprusTel:+35722602980Fax:+35722660135www.mof.gov.cy

CyprusSupervisoryAuthorityofOccupationalRetirementBenefitsFunds7ByronAvenue1465NicosiaCyprusTel:+35722401628Fax:+35722672984www.mlsi.gov.cy/sid

Czech RepublicCzechNationalBankNapríkope2811503Praha1CzechRepublicTel:+420224411111Fax:+420224412404or+420224413708www.cnb.cz

DenmarkFinanstilsynetAarhusgade1102100CopenhagenDenmarkTel:+4533558282Fax:+4533558200www.finanstilsynet.dk

EstoniaFinancialSupervisionAuthority/FINANTSINSPEKTSIOONSakalaStreet415030TallinnEstoniaTel:+3726680500Fax:+3726680501www.fi.ee

FinlandFinancialSupervisoryAuthorityP.O.Box10300101HelsinkiFinlandTel:+3581083151Fax:+358108315328www.fin-fsa.fi

FranceAutoritédeContrôlePrudentiel(ACP)61rueTaitbout75436ParisCedex09FranceTel:+33155504141Fax:+33155504150www.acam-france.fr

GermanyBundesanstaltfürFinanzdienstleistungs-aufsicht(BaFin)GraurheindorferStraße10853117BonnGermanyTel:+4922841080Fax:+4922841081550www.bafin.de

GreecePrivateInsuranceSupervisoryCommittee(PISC)Ypatias5GR10557AthensGreeceTel:+302103272610/620Fax:+302103230847www.pisc.gr

HungaryPénzügyiSzervezetekÁllamiFelügyeleteHungarianFinancialSupervisoryAuthorityKrisztinaKörút391013BudapestHungaryTel:+3614899100Fax:+3614899102www.pszaf.hu

IrelandThePensionsBoardVerschoyleHouse28/30LowerMountStreetDublin2IrelandTel:+35316131900Fax:+35316318602www.pensionsboard.ie

CentralBankofIrelandP.O.BoxNo559DameStreetDublin2IrelandTel:+35312246000Fax:+35316716561www.centralbank.ie

ItalyCommissionediVigilanzasuiFondiPensione(COVIP)ViainArcione,7100187RomaItalyTel:+3906695061Fax:+390669506271www.covip.it

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ItalyIstitutoperlaVigilanzasulleAssicurazioniPrivateediInteresseCollettivo(ISVAP)ViadelQuirinale,2100187RomaItalyTel:+3906421331Fax:+390642133206www.isvap.it

LatviaFinancialandCapitalMarketCommissionKunguiela1Riga,LV-1050LatviaTel:+37167774800Fax:+37167225755www.fktk.lv

LithuaniaInsuranceSupervisoryCommissionoftheRepublicofLithuaniaUkmergesstr.222LT07157VilniusLithuaniaTel:+37052431370Fax:+37052431399www.dpk.lt

LuxembourgCommissariatauxAssurances(CAA)7,boulevardRoyal2449LuxembourgTel:+3522269111Fax:+352226910www.commassu.lu

LuxembourgCommissiondeSurveillanceduSecteurFinancier110,routed’Arlon2991LuxembourgTel:+352262511Fax:+35226251601www.cssf.lu

MaltaMaltaFinancialServicesAuthorityNotabileRoadAttardMaltaBKR14Tel:+35621441155Fax:+35621441188www.mfsa.com.mt

NetherlandsDeNederlandscheBank(DNB)P.O.Box981000ABAmsterdamTheNetherlandsTel:+31205249111Fax:+31205242500www.dnb.nl

PolandPolishFinancialSupervisionAuthorityKomisjaNadzoruFinansowegoPl.PowstancowWarszawy100-950WarszawaPolandTel:+4822262-50-00Fax:+482226251-11(95)www.knf.gov.pl

PortugalInstitutodeSegurosdePortugal(ISP)AvenidadaRepública,761600-205LisboaPortugalTel:+351217903100Fax:+351217938568www.isp.pt

RomaniaInsuranceSupervisoryCommission(CSA)18th Amiral Constantin Balescu Street,sector1Bucharest011954RomaniaTel:+40213167880Fax:+40213167864www.csa-isc.ro

RomanianPrivatePensionSystemSupervisionCommission(RSCPPS)90–92CaleaSerbanVoda,Sector4Bucharest040213RomaniaTel.:+40213301035Fax:+40213301031www.csspp.ro

SlovakiaNationalBankofSlovakiaImrichaKarvasa181325BratislavaSlovakiaTel:+421257873301Fax:+421257873453www.nbs.sk

SloveniaInsuranceSupervisionAgencyTrgrepublike31000LjubljanaSloveniaTel:+38612528600Fax:+38612528630www.a-zn.si

SpainDirecciónGeneraldeSegurosyFondosdePensiones(DGSFP)MinisteriodeEconomíayHaciendaPaseodelaCastellana,4428046MadridSpainTel:+34913397100Fax:+34913397113www.meh.es

SwedenFinancialSupervisoryAuthorityP.O.Box7821,Brunnsgatan310397StockholmSwedenTel:+4687878000Fax:+468241335www.fi.se

United KingdomFinancialServicesAuthority(FSA)25TheNorthColonnade,CanaryWharfLONDONE145HSUnitedKingdomTel:+442070661000Fax:+442070661099www.fsa.gov.uk

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United KingdomThePensionsRegulatorNapierHouse,TrafalgarPlaceBRIGHTONBN14DWUnitedKingdomTel:+441273811800Fax:+441273627688www.thepensionsregulator.gov.uk

IcelandFinancialSupervisoryAuthority(FME)(Fjármálaeftirlitid)Su urlandsbraut,32108ReykjavíkIcelandTel:+3545252700Fax:+3545252727www.fme.is

LiechtensteinFinancialMarketAuthority(FMA)Heiligkreuz8P.O.Box2799490VaduzLiechtensteinTel:+4232367377Fax:+4232367376www.fma-li.li

NorwayFinanstilsynet(TheFinancialSupervisoryAuthorityofNorway)Postboks1187SentrumNO-0107OsloNorwayTel:+4722939800Fax.+4722630226www.finanstilsynet.no

European CommissionDirectionGénéraleMarchéIntérieurRuedelaLoi,2001049BrusselsBelgiumTel:+3222957954Fax:+3222993075www.ec.europa.eu/internal_market

A 4: List of Abbreviations

3L3 ThreeLevel3CommitteesAML/CFT Anti-MoneyLaundering/

CombatingtheFinancingofTerrorism

AMLTF Anti-MoneyLaunderingTaskForce

CEBS CommitteeofEuropeanBankingSupervisors

CEIOPS CommitteeofEuropeanInsuranceandOccupationalPensionsSupervisors

CESR CommitteeofEuropeanSecuritiesRegulators

CLD ConsolidatedLifeInsuranceDirective

Co-Cos Co-ordinationCommitteesCRD CapitalRequirementsDirectiveCP ConsultationpaperEBA EuropeanBankingAuthorityECOFIN EUCouncilofMinistersEEA EuropeanEconomicAreaEFC EconomicandFinancial

CommitteeEFCC EuropeanFinancial

ConglomeratesCommitteeEFC-FST EFC-FinancialStabilityTableEFRAG EuropeanFinancialReporting

AdvisoryGroupEIOPA EuropeanInsuranceandOccu-

pationalPensionsAuthorityEIOPC EuropeanInsuranceandOccu-

pationalPensionsCommitteeESA EuropeanSupervisoryAuthorityESFS EuropeanSystemofFinancial

SupervisorsESMA EuropeanSecuritiesand

MarketsAuthorityESRB EuropeanSystemicRiskBoardEU EuropeanUnionFATF TheFinancialActionTaskForce

FCD FinancialConglomeratesDirectiveFINMA SwissFinancialMarketSupervi-

soryAuthorityFSC FinancialServicesCommitteeIAIS InternationalAssociation

ofInsuranceSupervisorsIASB InternationalAccounting

StandardsBoardIFRS InternationalFinancial

ReportingStandardsIGS InsuranceGuaranteeSchemesILS InsuranceLinkedSecuritiesIMD InsuranceMediationDirectiveIOPS InternationalOrganisation

ofPensionSupervisorsIORPs InstitutionsforOccupational

RetirementProvisionIORPDirective Directive2003/41/ECofthe

EuropeanParliamentandoftheCouncilof3June2003ontheactivitiesandsupervisionofInstitutionsforoccupationalretirementprovision

IWCFC InterimWorkingCommitteeonFinancialConglomerates

JCFC JointCommitteeonFinancialConglomerates

MCR MinimumCapitalRequirementMiFID MarketsinFinancial

InstrumentsDirectiveMoU MemorandumofUnderstanding

NAIC USNationalAssociationofInsuranceCommissioners

ORSA OwnRiskandSolvencyAssessment

PRIP PackagedRetailInvestmentProduct

QIS4 FourthQuantitativeImpactStudy

Observers

A

96/97

QIS5 FifthQuantitativeImpactStudySCR SolvencyCapitalRequirementSPV SpecialPurposeVehicleSRP SupervisoryReviewProcess

TFIG TaskForceonInternalGover-nance

UCITS UndertakingsforCollectiveInvestmentsinTransferableSecurities

VaR ValueatRisk

1 https://eiopa.europa.eu/en/publications/submissions-to-the-ec/index.html2 https://eiopa.europa.eu/en/publications/submissions-to-the-ec/index.html3 https://www.ceiops.eu/requests-for-advice/index.html4 https://www.ceiops.eu/fileadmin/tx_dam/files/requestsforadvice/Equivalence-October-2010/

EC-call-for-advice-Equivalence-Nov.2010.pdf5 https://www.ceiops.eu/consultations/consultation-papers/december-2010/

call-for-evidence-solvency-ii-equivalence/index.html6 https://eiopa.europa.eu/fileadmin/tx_dam/files/publications/submissionstotheec/

ReportIORPdirective.pdf7 https://eiopa.europa.eu/fileadmin/tx_dam/files/publications/submissionstotheec/

CEIOPS-CEIOPS-issues-paper-on-cross-border-IORPs.pdf8 https://eiopa.europa.eu/fileadmin/tx_dam/files/publications/submissionstotheec/

CEIOPS-note-to-EC-on-cross-border-activity-of-IORPs.pdf9 https://eiopa.europa.eu/fileadmin/tx_dam/files/publications/reports/

CEIOPS-IORP-Market-Developments-Report-2010.pdf10 https://eiopa.europa.eu/fileadmin/tx_dam/files/publications/reports/

CEIOPS-IORP-Ring-fencing-in-Stress-Situations-20100705.pdf11 https://eiopa.europa.eu/fileadmin/tx_dam/files/publications/reports/

2010112-CEIOPS-Report-on-Management-Oversight-and-Internal-Controls-in-IORPs.pdf12 https://eiopa.europa.eu/fileadmin/tx_dam/files/publications/submissionstotheec/

20101115-CEIOPS-response-to-the-EC-Green-Paper-on-pensions.pdf13 https://eiopa.europa.eu/fileadmin/tx_dam/files/pressreleases/

20100316-CEIOPS-Press-Release-Stress-Test-EU-insurance-sector.pdf14 https://www.ceiops.eu/fileadmin/tx_dam/files/publications/reports/SII-Preparedness-20100708/

CEIOPS-Report-Preparedness-SII-20100708.pdf15 https://eiopa.europa.eu/publications/reports/index.html16 AllMembershaveimprovedtheirunderstandingoftheprovisionsoftheGeneralProtocoland/orcorrectedtheir

initialrepliesafteranothercheckoftheactualcaseswithregardto91provisions,andthat15Membershaveimprovedcomplianceinrelationto33provisions.GeneralProtocol,BudapestProtocol,HelsinkiProtocol:

17 GeneralProtocol,BudapestProtocol,HelsinkiProtocol:www.eiopa.europa.eu/publications/protocols/index.html18 http://www.c-ebs.org/documents/Publications/Other-Publications/Comment-letters-by-CEBS/Other-Areas/

2010-08-31-(CEBS-response-to-EU-Commissions-green-.aspx19 16areashavebeenidentifiedatthetimeofdraftingtheworkplan.20 https://www.ceiops.eu/requests-for-advice/index.html21 https://www.ceiops.eu/publications/standards-and-more/index.html22 AlltaskstakenfromthewordingofoldArticle6a(newArticle9)ofthedraftRegulationestablishingEIOPA,

althoughnotarticulatedinfull

A 5: Endnotes

A