In order to support the activity of the three recently launched European Supervisory Authorities, the Commission has proposed to make targeted changes to legislation in the area of insurance and securities regulation. The proposal sets out in detail the scope for the Authorities to exercise their powers, ncluding the possibility to develop draft technical standards and to settle disagreements between national supervisors.

Commission's proposal for changes in insurance and securities regulations complements a package of legislative acts on financial supervision which were agreed on 22 September 2010 and entered into force on 1 January 2011. This package created a new architecture for supervision at European level with three new European Supervisory Authorities (ESAs).

In order for the ESAs to work effectively, changes to existing financial services Directives are necessary, laying down the precise scope for the ESAs to exercise certain of the new powers.

The legislative proposal put forward by the Commission contains a limited set of amendments to the "Solvency II" Directive, which was not included for technical reasons in the financial package already agreed. These amendments include the provision of more specific tasks for European Insurance and Occupational Pensions Authority (EIOPA) such as ensuring harmonised technical approaches on the use of ratings in relation to the Solvency Capital Requirements, and extending the implementation date by two months to ensure better alignment with the end of the financial year for the majority of insurance and reinsurance undertakings. The amendments will also enable the Commission to specify transitional measures in certain areas if deemed necessary to avoid market disruption and to allow a smooth transition to the new regime under "Solvency II".

European Supervisory Authorities (ESAs)

The ESAs, which replace the former European Committees for the banking, securities and insurance and occupational pensions sectors, are the European Banking Authority (EBA), the European Insurance and Occupational Pensions Authority (EIOPA), and the European Securities and Markets Authority (ESMA).

The trio of new ESAs have taken over all of the functions of the previous committees, and in addition have certain additional competences, such as developing proposals for technical standards to better define common standards for the application of legislative acts, respecting better regulation principles; resolving cases of disagreement between national supervisors; contributing to ensuring consistent application of existing and future technical EU rules or the role for coordination in emergency situations.