Answers to the European Commission on the ... - Eiopa - Europa

14.43 Regarding <strong>the</strong> actuarial function, supervisory authorities should have
<strong>the</strong> power <strong>to</strong>:
Market Conduct
• ask <strong>the</strong> insurer <strong>to</strong> disclose <strong>the</strong> actuarial resources employed, so
that <strong>the</strong>y can assess <strong>the</strong> degree of reliance that should be placed
on <strong>the</strong> actuary’s work;
• remove <strong>the</strong> responsible actuary (if appointed by <strong>the</strong> insurer) if
<strong>the</strong> actuary fails <strong>to</strong> perform <strong>the</strong> required functions and duties
adequately or does not fulfil eligibility or fit and proper criteria. 119
• be promptly informed in cases where <strong>the</strong> insurer removes its
responsible actuary;
• be able <strong>to</strong> address any concerns that may arise when an insurer
removes a responsible actuary in an attempt <strong>to</strong> undermine <strong>the</strong>
role of <strong>the</strong> actuary or <strong>the</strong> actuary’s advice; and
• provide a legislative duty for <strong>the</strong> actuary <strong>to</strong> report <strong>to</strong> <strong>the</strong>
supervisor in circumstances where <strong>the</strong> actuary considers that
policyholders’ rights are threatened or <strong>the</strong> financial condition of
<strong>the</strong> insurer may be jeopardised.
14.44 Supervisory authorities should have <strong>the</strong> power <strong>to</strong> assess <strong>the</strong> level of
compliance with <strong>the</strong> market conduct requirements in order <strong>to</strong> assess
any effect on <strong>the</strong> risk profile of <strong>the</strong> undertaking. This power must
apply, wherever necessary, <strong>to</strong> insurance intermediaries.
14.45 In addition <strong>to</strong> <strong>the</strong> powers described above, supervisory authorities
should be able <strong>to</strong> simultaneously demand an increase in <strong>the</strong> solvency
capital requirement if it identifies a clear failure in terms of market
conduct, which may impact <strong>the</strong> solvency position of <strong>the</strong> insurer.
14.46 Supervisory authorities should have <strong>the</strong> power <strong>to</strong> publish <strong>the</strong> measures
adopted, ei<strong>the</strong>r in an official journal or by requesting that <strong>the</strong> Board of
Direc<strong>to</strong>rs or Senior Management disclose <strong>the</strong>m <strong>to</strong> <strong>the</strong> owners and <strong>the</strong>
policyholders, as well as beneficiaries. CEIOPS believes that before
disclosing sensitive issues <strong>the</strong> possible impact on policyholders’
interests should also be taken in<strong>to</strong> account.
Principles underpinning <strong>the</strong> use of preventive measures
14.47 Supervisory authorities should take preventive measures which are
timely, suitable and necessary <strong>to</strong> achieve <strong>the</strong> objectives of supervision.
14.48 Preventive and corrective measures should be taken if an insurer fails
119 A minority of CEIOPS’ members do not wish <strong>to</strong> see this requirement in <strong>the</strong> future framework.
120 CEIOPS-CP-06/05, available on CEIOPS’ website: www.ceiops.org.
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