EIOPA – Supervision on compliance with the “principle of the prudent person”

On May 2nd, EIOPA (European Insurance and Occupational Pensions Authority) published the results of the review conducted on the supervision by the National Supervisory Authorities regarding the application and compliance with the “principle of the prudent person”.

The European Authority emphasized that this principle is of particular importance within the Solvency II regulatory framework, as it requires insurance and reinsurance companies to invest only in assets they can predict, monitor, and manage risks for, considering the best interests of policyholders.

In this regard, the review primarily focused on the supervision of investments in non-traditional and complex assets. Based on the responses provided by the National Supervisory Authorities to a self-assessment questionnaire, EIOPA issued 49 recommendations to enhance the supervision on compliance with this principle by the National Supervisory Authorities.
EIOPA announced that it will monitor the implementation of the recommended actions.