The Board of Supervisors of the European Insurance and Occupational Pensions Authority (EIOPA) held its inaugural session today, 10 January 2011, in Frankfurt am Main, Germany. Austrian interests are represented in this new central European supervisory institution by the Financial Market Authority (FMA), as a voting member. The FMA is represented in the institution’s committees by Peter Braumüller, Director of the Insurance and Pension Companies Supervision Department at the FMA. During the first session, in addition to agreeing the Rules of Procedure, the institution elected an acting Chair. A further six members were also elected to the EIOPA Management Board, including the FMA’s representative, Peter Braumüller.
“The FMA will play an active part in the new European supervisory system, and will cooperate closely on the ESA committees and working groups,” stated FMA Executive Directors Helmut Ettl and Kurt Pribil. They continued to explain, “After all, a single internal market for financial services also needs fair conditions for competition, and thus including a harmonised legal framework with consistent enforcement of the laws.”
Within the new European supervisory system, which entered into force on 1 January 2011, EIOPA is the central European Supervisory Authority (ESA) with responsibility for insurance and occupational pension fund supervision. Its counterparts in the banking sector and securities sector are the London-based European Banking Authority (EBA) and the Paris‑based European Securities Markets Authority (ESMA). These three ESAs have been formed from the former level 3 committees (the Committee of European Banking Supervisors, CEBS; the Committee of European Insurance and Occupational Pensions Supervisors, CEIOPS; and the Committee of European Securities Regulators, CESR), on whose infrastructure they have been created. The ESAs do not replace the national supervisory authorities however, but will work closely in concert with them.
Each ESA has an independent Chair, who acts as the face of the authority. The Chair is elected by the Board of Supervisors, and must be confirmed in his or her post by the European Parliament. However, operational and administrative decisions of the authorities are made by the Board of Supervisors, which is composed of one representative of each of the national supervisory authorities of the EU Member States. Austria is represented in this body by the FMA, as a voting member. Alongside the Board of Supervisors, each of the ESAs has a Management Board comprising six members, to which responsibility is conferred for specific organisational tasks. Each of the authorities is led by an Executive Director, who prepares the work of the Management Board. He is appointed by the Board of Supervisors.
The three authorities will continue the activities of the former level 3 committees. However, their scope of activity, responsibilities and therefore the powers available to them for inspection – in close cooperation with the national supervisory authorities – have been greatly expanded in line with their position as an authority. One of the objectives of the ESAs is to contribute to the harmonisation of supervisory rules in the internal market, and to establish a single culture of supervision in order to ensure that EU legislation is applied uniformly and coherently. To this end, they must conduct regular comparative analysis (referred to as peer reviews), and must monitor and evaluate market developments, and develop criteria and methods for measuring systemic risks. In the event of differences of opinion and disagreements between national supervisory authorities, they may also issue decisions that are binding for all concerned, and may also issue decisions directly to financial institutions in the exercising of their specific supervisory powers.
Klaus Grubelnik (Media Spokesperson)
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