The new European Insurance and Occupational Pensions Authority (EIOPA) opens its doors in 2011 with the prospect of greatly increased powers and a fivefold increase in staff in due course. EIOPA replaces the existing Committee of European Insurance and Occupational Pension (CEIOPS), which is one of the three ‘level three' bodies alongside the banking and securities committess - ‘level three' refers to the four-step process to facilitate financial services legislation. The European Banking Authority and the European Securities and Markets Authority will replace the banking and securities committees, also from 2011.
However, reactions are mixed to the creation of the new bodies. Peter Skinner, MEP, hails the development as very significant for the future of the European single market in financial services. "For the first time ever we have a body with the power to ensure EU rules are being followed in each member state," he says.
Skinner has stated that that the Parliament "won significant concessions from national governments over the power of the new supervisory authorities", and says these will facilitate settling "disagreements between quarrelling national authorities". He stresses the importance of creating a joint committee to allow the three new authorities to co-ordinate.
CEIOPS is now staffed by around 20 civil servants seconded from EU national governments. While some of them may have their national interests at heart, they will work to a truly European mission, similar to that of officials in the Commission, says an observer.
However, this observer also says that due to recruitment and training requirements the upgraded institution may not operate effectively until 2013. Still, he describes as "a milestone" the planned creation of separate industry consultative group panels for pensions and insurance in contrast to today's single panel.
Jacqueline Lommen, senior international benefits consultant at Aon Hewitt, cites the need for more European co-ordination. "International companies require international pensions standards, especially against a background of increased employment mobility within the EU," she says.
Describing EIOPA as "a good development", Lommen predicts that details of legislation, including on taxation and social rules, will still be left to member states after the 2011 launch. Initial harmonisation is likely to affect organisations offering pensions, such as pension funds, insurance firms and the managers of occupational pension schemes.
This could include solvency buffers to secure pensions promises. Lommen says member states with the best-developed pensions markets - such as Ireland, the Netherlands and the UK - will feel the results of the changes most. Lommen predicts that EIOPA will follow up action from the Commission's current green paper on pensions. A likely development will be that Frankfurt's imbalance of focus between the insurance and pension sectors will be evened out.
However, European Federation of Retirement Provision (EFRP) secretary general Chris Verhaegen, gives EIOPA a less than warm reception. She says: "It is difficult to welcome something when you don't really know how the details will work out. We want to see not just what powers EIOPA will have, but how they will use them.
"Among our members there is fear on questions of harmonisation of rules across the EU," she continues. "When dealing with the IORP Directive, EFRP members are very much concerned that the diversity of pension norms extant in the different counties may not properly be taken into account."
Verhaegen observes with some trepidation that the empowerment of those authorities to draft technical standards for insurance and occupational pensions - currently limited under IORP - means that the Commission will be able to adopt the technical standards without any further negotiation with member states. She warns that EIOPA will also have to table (non-binding) advice to the Commission whenever the latter is writing a report on the calculation of technical provisions.
However, the Brussels-based European Association of Paritarian Institutions (AEIP) does welcomes EIOPA. The AEIP is on the consultative panel of CEIOPS where secretary general Bruno Gabellieri repesents it. "We are going to stay active in the new stakeholder group of EIOPA," he says.