EIOPA Consultation Paper on the Proposal for Guidelines on the System of Governance

EIOPA’s publication of a consultation paper on proposed guidelines for the early introduction of the System of Governance is intended to ensure a consistent and convergent approach in preparations for Solvency II. The guidelines, which set a framework for National Competent Authorities (NCAs) to ensure that firms are implementing the Pillar 2 requirements relating to the System of Governance in accordance with the Solvency II Directive, are largely consistent with those set out in the Level 3 pre-consultation paper issued in December 2011. However, the proposed guidelines for NCAs relating to the Actuarial Function appear to require the function to focus on areas of non-compliance rather than evidencing compliance. This Solvency II Update provides an overview of EIOPA’s proposed guidelines.