The European Insurance and Occupational Pensions Authority (EIOPA) has released new guidelines outlining diversity considerations for re/insurance undertakings in the selection of members for their administrative, management, and supervisory bodies.
The move follows a recent amendment to the Solvency II Directive, which seeks to promote greater diversity among decision-makers within the sector.
The updated regulatory framework, introduced during the Solvency II Review, requires re/insurance undertakings to implement policies that foster diversity within their governing bodies. This includes establishing quantitative objectives related to gender balance. EIOPA was tasked by the amendment to provide guidelines clarifying the concept of diversity.
The guidelines encourage re/insurers to consider a range of factors when composing their senior leadership teams, including educational and professional background, age, gender, and geographical origin. These considerations are to be applied both during the recruitment of new members and on an ongoing basis.
EIOPA said that diverse and inclusive decision-making bodies can bring together a wide array of experiences, knowledge, and skills. The authority noted that such diversity contributes to a variety of perspectives, supports independent thinking, and helps prevent groupthink, all of which are intended to enhance the quality of decision-making within European re/insurers.
The guidelines are scheduled to take effect on Jan. 30, 2027.
As the European Commission and European Parliament continue to negotiate the technical details of Solvency II reforms, the changes are expected to come into force in 2027. The European Commission has estimated that the reforms could increase insurers’ Own Funds by approximately €60 billion, which is intended to strengthen the industry’s capacity to invest in the broader economy.
However, Moody’s Ratings has noted that these proposed changes have sparked debate about the balance between regulatory capital relief and the long-term resilience of the insurance sector.
EIOPA has warned that some proposals could weaken insurers’ capital buffers and increase systemic risk, with EIOPA chair Petra Hielkema calling for greater caution in the implementation of Solvency II reforms.
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