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

18.34 CEIOPS advises that <strong>the</strong> aim of an adequate distribution of capital
within a group needs <strong>to</strong> remain a requirement.
Elements eligible for <strong>the</strong> solvency margin and transferability of capital
18.35 The issues outlined above also fundamentally relate <strong>to</strong> <strong>the</strong> definition of
eligible forms of capital, as well as <strong>the</strong> question of transferability of
capital within a group. CEIOPS will fur<strong>the</strong>r consider <strong>the</strong>se issues in its
answer <strong>to</strong> CfA 19.
Allocation of supervisory responsibilities and co-operation
18.36 The group SCR should be an important part of <strong>the</strong> supervisory review.
A breach of <strong>the</strong> group SCR should trigger supervisory action in order <strong>to</strong>
ensure that <strong>the</strong> group remedies <strong>the</strong> situation. Therefore CEIOPS
advises that <strong>the</strong> Framework Directive should, in addition <strong>to</strong> addressing
<strong>the</strong> assessment process and responsibilities, define both <strong>the</strong>
supervisory authority competent <strong>to</strong> take action and supervisory
instruments available. CEIOPS will address <strong>the</strong> issue of allocation of
supervisory responsibilities and supervisory instruments and powers of
intervention within a group context in more detail in its response <strong>to</strong> <strong>the</strong>
CfA 21 (Co-operation between Supervisory Authorities).
18.37 At this stage, however, CEIOPS advises <strong>the</strong> <strong>Commission</strong> Services that
<strong>the</strong> provisions in <strong>the</strong> IGD do not suffice in this respect. CEIOPS fully
subscribes <strong>to</strong> <strong>the</strong> statement in <strong>the</strong> Framework for Consultation that
management decisions are increasingly being taken by <strong>the</strong> parent
undertaking. Hence <strong>the</strong> relevant rules need <strong>to</strong> be set at <strong>the</strong> relevant
level. As indicated, CEIOPS will fur<strong>the</strong>r consider this in its answer <strong>to</strong>
CfA 21. Never<strong>the</strong>less, at this stage CEIOPS advises that Section 3 of
<strong>the</strong> FCD – "Measures <strong>to</strong> facilitate supplementary supervision" – will be
an important input in<strong>to</strong> that process. The Framework Directive should
explicitly address <strong>the</strong> determination of <strong>the</strong> competent authority
responsible for exercising supplementary supervision (group
supervisor), <strong>the</strong> task of any such group supervisor, <strong>the</strong> co-operation
and exchange of information between competent authorities, <strong>the</strong>
access <strong>to</strong> and verification of information, enforcement measures and
additional powers of <strong>the</strong> competent authorities.
Institutions with a parent undertaking outside <strong>the</strong> EU
18.38 CEIOPS also notes that <strong>the</strong> FCD addresses explicitly <strong>the</strong> situation of
institutions with a parent undertaking outside <strong>the</strong> Community. CEIOPS
would expect that <strong>the</strong> Framework Directive will also explicitly address
this situation.
CEIOPS’ Advice
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