The aim of this Statement is to strengthen the level of supervision and monitoring of insurance undertakings’ and insurance intermediaries’ compliance with relevant legislation in connection with their governance arrangements in third countries, where the ultimate policyholders are situated within the European Union.
In view of EIOPA’s expectations as outlined in the Statement, undertakings should thoroughly assess their corporate substance within the EU. An undertaking should ensure that the respective Administrative Management or Supervisory Board members and key/critical function holders are located in the Member State of its head office and are dedicating adequate time to fulfil their duties. Likewise, the undertaking is required to have an adequate level of staff established within the EU, which is proportionate to the extent of the regulated business being carried out by the undertaking in the EU. One of the clear aims of the Statement is to avoid regulated setups within the EU which are significantly being managed and serviced through third country branches, thus rendering such a setup as an empty shell.
Further information on this Statement can be found here: https://www.eiopa.europa.eu/publications/supervisory-statement-use-governance-arrangements-third-countries_en