EIOPA assesses the progress of supervision in IORP’s Prudent Person Rule compliance

EIOPA has released a follow-up report on the application of the Prudent Person Rule for IORPs in accordance with the IORP II Directive. The Prudent Person Rule requires IORPs to invest in the best interests of their members and beneficiaries while adhering to specific investment rules.
The 2019 peer review identified 27 recommendations across seven areas for 28 NCAs. The follow-up report reveals that 8 recommendations were fully fulfilled, 10 were partially fulfilled, and 9 were not fulfilled. The report highlights progress in areas such as the look-through methodology for collective investment vehicles, but notes challenges in governance assessment and on-site inspections.
The implementation of recommended actions often depends on the implementation status of the IORP II Directive, and some NCAs are still transitioning to a risk-based approach. Lack of resources and differing priorities are cited as reasons for non-fulfillment. EIOPA encourages NCAs to consider best practices for the development of their national supervisory practices, emphasizing ongoing monitoring of recommended actions.
The report includes detailed assessments in areas such as supervisory structure, information gathering, governance, on-site inspections, and supervisory tools. It also evaluates the implementation of best practices identified in the peer review.