EIOPA issued its opinion on the supervision of captive insurers

2 July 2024 — Daniela GHETU

The European Insurance and Occupational Pensions Authority (EIOPA) published its Opinion regarding the supervision of captive (re)insurance undertakings, with a particular focus on intra-group transactions, the prudent person principle and governance.

The European Insurance and Occupational Pensions Authority (EIOPA) provides this Opinion on the basis of Article 29(1)(a) of Regulation (EU) No 1094/2010. This article mandates EIOPA to play an active role in building a common Union supervisory culture and consistent supervisory practices, as well as in ensuring uniform procedures and consistent approaches throughout the Union by providing opinions to competent authorities. As such, this Opinion is addressed to competent authorities and outlines the supervisory expectations while taking into account the specificities of captive (re)insurers’ business models.

The Opinion aims at facilitating a risk-based and proportionate supervision of captive (re)insurance undertakings and further support the convergence of supervisory expectations in the context of creating a level playing field within the EU. The document sets out supervisory expectations in several areas, including intra-group transactions (especially cash pooling), the consistent application of the prudent person principle as well as governance-related aspects in connection with key functions and outsourcing requirements.

The Opinion seeks to ensure a high-quality and convergent supervision of captive (re)insurance undertakings.

All EIOPA documents on this topic are available here.