The European Insurance and Occupational Pensions Authority (EIOPA) has outlined plans to simplify regulation and reduce administrative burdens in order to help create a more resilient and competitive European economy.

Announcing its new approach, EIOPA said that "smarter, more harmonised" regulation, alongside more effective supervision at the EU level, is needed to achieve a balanced and credible outcome.

"In an era of geopolitical and economic instability, Europe must increasingly act as a single entity," the authority said. "Europe can no longer rely as heavily on strong external demand as it has in the past – strengthening internal demand is now crucial."

In particular, EIOPA argued that Europe must do more to foster a thriving and resilient economy, suggesting that simplification and burden reduction could be a meaningful catalyst for growth.

EIOPA said this could also create more cohesion across Europe, arguing that regulatory streamlining should aim at creating a stronger and more cohesive framework across the EU by eliminating unnecessary divergence across Member States.

Given this, it stressed the need for any regulatory simplification to prioritise EU interests over national ones, to prevent market fragmentation through a holistic, long-term approach, and to avoid new national obligations springing up where EU requirements have been reduced.

However, EIOPA also emphasised the need to maintain "robust" consumer protections, warning that regulatory simplification must also not come at the expense of effective supervision, as well as the impact of any new supervisory action or instruments.

As a result, it confirmed that it will work with its members to "carefully evaluate" what data is essential for supervisory work.

Thinking specifically about policymaking, EIOPA argued that simplification should begin at the earliest stages of the EU legislative process as mandates defined in the regulation have real-life impacts in terms of industry obligations and supervisory responsibilities.

In line with this, it suggested that greater involvement from EIOPA during level one negotiations, especially for horizontal legislation, would help to ensure solid technical input to co-legislators regarding the need for specific mandates.

In addition to this, EIOPA said that certain areas could benefit from further harmonisation to eliminate the fragmentation and barriers to entry that minimum harmonisation regulation can give rise to.

EIOPA suggested that a stronger mandate at the EIOPA Board level would help reduce complexity and enhance efficiency, arguing that strong supervisory convergence is "essential" to ensure a well-functioning Single Market.

The authority also highlighted the work already done to advance regulatory simplification in areas of its work, including shortening Solvency II guidelines, streamlining reporting templates and reducing data points for Solvency II reporting, and introducing proportionality principles where possible.

EIOPA confirmed that it will also support the European Commission in simplifying Europe's sustainability reporting while ensuring (re)insurers and pension funds access reliable and standardised data to manage climate risks.

EIOPA chair, Petra Hielkema, said: “Regulatory simplification and burden reduction is important and possible. Yet, it should be viewed as a means to an end, not as the end itself.

"The ultimate goal, after all, is to create a more resilient and competitive European economy, where businesses can flourish, consumers are well protected, and financial stability is maintained.

"Efforts to simplify regulation must, in our view, strike the right balance, ensuring that streamlining leads to a stronger, more cohesive framework, rather than introducing new gaps, inconsistencies or unintended burdens elsewhere.”

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