EIOPA issues recommendation to Slovakian firm over Solvency II non-compliance

The European Insurance and Occupational Pensions Authority (EIOPA) has issued a recommendation to a Slovakian insurance company under the supervision of Národná banka Slovenska (NBS) over non-compliance with Solvency II rules.

The recommendation was issued in accordance with EIOPA’s powers laid down in Article 17 of the EIOPA Regulation concerning breach of union law.

The insurance company was found to be non-compliant with Solvency II rules in relation to technical provisions, capital requirements, investments and system of governance.

EIOPA noted that while the NBS has adopted several measures to remedy the situation, the authority considered the steps taken as “insufficient” and decided to launch a breach of union law investigation.

The investigation concluded that the NBS has failed to take the necessary corrective measures defined by the Solvency II Directive “in a timely and proportionate manner to address the firm’s non-compliance”.

EIOPA recommended the NBS to consider whether it had exhausted the list of proportionate supervisory options available or whether there was an alternative that would be proportionate to the “long duration and gravity of non-compliance”.

According to EIOPA’s recommendation, the NBS should adopt a position, verify and conclude on the compliance of the firm with the supervisory decisions of the NBS within 45 days.

Furthermore, EIOPA recommended that the NBS should take the necessary steps and measures pursuant to the Solvency II Directive to ensure compliance with union law as part of an intervention strategy by the NBS.

It stated that this should result in either a structural and sustainable recovery of all infringements or, if appropriate or mandatory, a withdrawal of firm’s authorisation.

The NBS is required to inform EIOPA within 10 working days of the receipt of the recommendation of the steps it has taken or intends to take.

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