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

company or any o<strong>the</strong>r structure.
18.81 CEIOPS considers that <strong>the</strong> FCD which clearly defines <strong>the</strong> role of <strong>the</strong>
different authorities involved in supervision has been a positive
development and <strong>the</strong> Solvency II framework should reflect this. At this
stage CEIOPS has not yet examined <strong>the</strong> alternative approach of
following <strong>the</strong> banking model of full consolidated supervision structure.
18.82 CEIOPS considers that <strong>the</strong>re is need <strong>to</strong> define a group supervisor in
<strong>the</strong> Framework Directive. This group supervisor would be responsible
for <strong>the</strong> implementation of <strong>the</strong> Supervisory Review Process of <strong>the</strong> group
according <strong>to</strong> group wide requirements. Notwithstanding, it is important
<strong>to</strong> note that <strong>the</strong> competent authority responsible for <strong>the</strong> supervision of
solo undertaking will also be <strong>the</strong> authority responsible for <strong>the</strong> SRP of
that entity. The group supervisor should work jointly with <strong>the</strong>
supervisors of <strong>the</strong> solo entities of <strong>the</strong> group.
18.83 Regarding <strong>the</strong> measures of intervention and <strong>the</strong> powers assigned <strong>to</strong>
<strong>the</strong> group supervisor, CEIOPS advises <strong>to</strong> explicitly provide such powers
in <strong>the</strong> Framework Directive. These powers will have <strong>to</strong> have regard <strong>to</strong>
any trigger levels determined elsewhere (both at solo and group
levels), and on <strong>the</strong> supervisory action derived from <strong>the</strong>se trigger
levels.
18.84 Beyond <strong>the</strong> explicit provisions in <strong>the</strong> future Framework Directive,
CEIOPS advises <strong>to</strong> consider allowing flexibility in <strong>the</strong> group
supervisor’s responsibilities so that it can consider all relevant issues
that might have an impact on <strong>the</strong> group solvency.
18.85 Assessment of <strong>the</strong> adequacy of group capital should be <strong>the</strong>
responsibility of <strong>the</strong> group supervisor. Please also see CEIOPS’
recommendations on <strong>the</strong> validation of internal models (part IV of this
answer).
18.86 Fur<strong>the</strong>rmore, <strong>the</strong> group supervisor would be responsible, in close cooperation
with <strong>the</strong> solo supervisors, for verifying compliance of <strong>the</strong>
following qualitative requirements at group level (Pillar II):
a) governance, Risk Management and Internal Control
b) risks that are taken in<strong>to</strong> account in Pillar I, but may be not
sufficiently reflected in <strong>the</strong> Pillar I formulas (standard
formula as well as internal models).
The SCR formula will include <strong>the</strong> major quantitative risk categories.
But it is likely that some risk aspects will need <strong>to</strong> be considered
additionally in Pillar II in a qualitative way. These risk aspects may
also need <strong>to</strong> be specifically reflected in <strong>the</strong> group context as well.
Therefore it seems necessary for supervisors <strong>to</strong> assess group level
compliance with <strong>the</strong> actual risk profile of <strong>the</strong> qualitative risks
requirements.
18.87 To achieve <strong>the</strong> goal of an efficient supervision of groups, <strong>the</strong> principle
of reciprocal information exchange needs <strong>to</strong> be strongly asserted in <strong>the</strong>
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