Welcome to the FIG Top 5 at 5

Background to Consultation

On 3 February 2026, European Insurance and Occupational Pensions Authority (“EIOPA”) launched a public consultation (the “Consultation”) on the supervisory statement on the authorisation and ongoing supervision of (re)insurance undertakings related to private equity (“PE”) firms (the “Supervisory Statement”).

It has been delivered on the basis of Directive 2009/138/EC (the “Solvency II Directive”), with the Consultation aimed at promoting consistent, high quality and risk-based supervision across the European Union (the “EU”).

In announcing the Consultation, EIOPA noted that over the past decade, PE firms have shown a growing interest in acquiring EU (re)insurance undertakings, bringing along changes in the strategy, governance, risk management and asset allocation of those undertakings. EIOPA notes that, after analysing recent cases, both EIOPA and national supervisory authorities have identified a series of risks and supervisory challenges associated with these acquisitions, including:

• short or misaligned investment horizons that may be conflicting with long-term policyholder commitments;
• significant changes in business models, such as use of private credit, illiquid assets and balance-sheet optimisation;
• increased reliance on reinsurance, especially from reinsurers (in some case belonging to the same PE group) located in third-countries; and
• complex ownership structures that may hinder effective supervision.

Context and Objective of Consultation

In its consultation paper dated 27 January 2026 (the “Consultation Paper”), EIOPA notes that the growing interest by PE firms in acquiring, partially but more often totally, (re)insurance undertakings developed firstly in the United States, with PE firms thereafter becoming important buyers / owners in the EU.

As owners of (re)insurance undertakings, EIOPA states that PE firms have often taken an active role in defining the strategy of and managing the undertakings which EIOPA refers to for the purposes of the Consultation Paper as their “modus operandi”.

EIOPA notes that, when applied properly and fairly, this modus operandi may bring potential benefits in terms of a more diverse investment strategy resulting in higher yields and easier access to capital and guarantees that benefit policyholders.  It notes that, from an operational perspective, cost optimization may provide a more efficient and sustainable business.

According to EIOPA, ownership structures used by some PE firms when acquiring (re)insurance undertakings can also pose challenges for supervisory authorities, especially during the acquisition process subject to a limited time frame of 60 working days under Article 58 of the Solvency II Directive. These challenges arise particularly in the context of the number of intermediary holdings at play, the composition and location of such entities (e.g. in third countries), and the PE firm’s modus operandi and governance.

EIOPA further notes that the new business strategy implemented by the PE firm as the owner might be more challenging to supervise, thus requiring increased resources and scrutiny from supervisory authorities. EIOPA makes specific reference to the following:

• short-term investment horizon of PE funds;
• changing the asset allocation of targeted (re)insurance undertakings towards private credit and illiquid assets;
• material use of reinsurance from third-country jurisdictions; and
• other forms of balance sheet enhancement.

EIOPA hopes that the Supervisory Statement will ensure high-quality and convergent supervision of (re)insurance undertakings related to PE firms, considering their specific nature and risks. It sets out supervisory expectations for acquisitions of qualifying holdings, portfolio transfers and mergers, as well as for on-going supervision.

Supervisory authorities will be required to apply the Supervisory Statement in accordance with the principles of risk-based and proportionate supervision and should be read conjunction with Articles 29, 30, 34 and 36 of the Solvency II Directive, EIOPA’s supervisory statement on the supervision of run-off undertakings, EIOPA’s supervisory statement on the supervision of reinsurance concluded with third-country (re)insurance undertakings, EIOPA’s Guidelines on system of governance, and the Joint Guidelines on the prudential assessment of acquisitions and increases of qualifying holdings in the financial sector.

The Consultation opened on 3 February 2026, with stakeholders invited to provide feedback by responding to various questions in EIOPA’s survey in advance of 30 April 2026 (further information on the Consultation is available here).

Next Steps

The FIG Top 5 at 5 will continue to monitor the progress and outputs of the Consultation and update clients when appropriate.

On 3 February 2026, Patrick Montagner, member of the Supervisory Board of the European Central Bank (the “ECB”), delivered a keynote speech at the 10^th Annual FinTech and Regulation Conference in Brussels (the “Speech”).

Patrick Montagner noted at the outset that the greatest risk facing European banks may be the innovations they fail to pursue. He noted that supervisors welcome banks’ efforts to innovate and invest, but also want to see innovation that strengthens the financial system and supports the economy, and to avoid innovation that exploits differences in regulatory treatment.

The Speech, a full transcript of which is available here, focused on four key points:

1. innovation is essential and requires sustained investment;
2. artificial intelligence (“AI”) adoption is accelerating and governance must keep pace with increasingly sophisticated systems;
3. tokenisation and digital assets require strategic thinking; and
4. regulation enables innovation by creating a common language for managing risks – particularly the interconnected risks related to cybersecurity, AI and third-party dependencies.

The Speech provides insight into the ECB’s perspective with regard to digital transformation, with the overarching points being as follows:

• Innovation is essential for banks to remain competitive and for the European economy to grow. If banks do not adopt modern digital systems, the sector’s capacity to respond to competitive pressures from neobanks and large technology companies may diminish, potentially reducing revenues and leaving it more vulnerable to shocks. Reliance on outdated systems may also heighten banks’ exposure to cyberattacks and data breaches.
• Indeed, the technologies at play and on the horizon today offer enormous potential. AI can dramatically improve decision-making, fraud detection and customer service. Tokenisation and smart contracts can revolutionise settlement, reduce friction and enable new business models. The digital euro, too, will provide European banks with infrastructure for digital payments that reduces strategic dependencies and fosters innovation.
• However, these technologies also create risks for individual institutions and for financial stability. They may give rise to real challenges, such as concentration in technology providers, sophisticated cyber threats enabled by AI, or complex dependencies across third parties, all of which require robust governance and forward-looking risk management.
• To fully harness the benefits of innovation, which has already improved cross-border operations, we need to further promote integration and harmonisation within the single market. This will allow banks to build on these advancements, achieving greater integration and real economies of scale.
• Regulation already gives us a foundation and a common language for managing these risks consistently. The Digital Operational Resilience Act (“DORA”), the Markets in Crypto-Assets Regulation (MiCAR) and the Artificial Intelligence Act (the “AI Act”) create shared understanding, enable coordination and forge collective resilience.
• In 2026, the ECB will continue monitoring AI, with a focus on generative AI applications. The ECB will also deepen its assessment of third-party dependencies, particularly concentration in critical service providers. And, building on DORA, we will strengthen our work on operational resilience.

Patrick Montagner concluded noting that the banking sector is undergoing a transformation and European banking supervision is moving with it by taking a supervisory approach that enables banks to be both stable and innovative.

On 2 February 2026, EIOPA published a report (“Report”) on the use of Generative AI (“Gen AI”) across Europe’s insurance sector.

The Report provides valuable insights into EIOPA’s view of the current state of Gen AI adoption, the opportunities the technology brings, as well as the risks and challenges undertakings face in implementing it. It also deals with the increasing adoption of Gen AI among European insurers, with nearly two-thirds of undertakings already using the technology.

Main drivers for Gen AI adoption and current use cases

The Report identifies a number of the main drivers for adopting Gen AI systems in European insurance undertakings as follows:

• developing software capable of automating repetitive tasks, and supporting tasks such as document drafting, document summarisation, note-taking, planning and data analysis in order to improve efficiency in the organisation;
• enhancing customer interactions by using AI tools to improve claims handling journeys, and enabling faster and more direct processing of requests; and
• supporting decision-making and increasing the quality of insurance products and services. The Report notes pilot initiatives adopted by some insurers to provide support to underwriters and actuaries by automating the ingestion of information provided by new customers, assessing individual risks, and improving pricing and underwriting models.

To this effect, the Report highlights that European insurers are taking a cautious approach to the adoption of Gen AI tools, by focusing on internal processes, and maintaining strong human oversight. The Report identifies that the majority of the reported use cases (64%) were in productivity tools. In addition, 36% reported the development of customer-facing Gen AI tools such as chatbots, acting as support tools for front-line employees.

Challenges, risks and ways to mitigate them

Some of the key challenges that hinder or slow down the adoption of AI systems by European insurers identified by the Report are as follows:

• data privacy and security concerns;
• potential issues with regulatory compliance; and
• lack of sufficiently skilled staff.

The Report also identifies inaccurate outputs as the top-cited risk connected to Gen AI systems, followed by cybersecurity risks and data protection issues. Responses also indicated that European insurers rely heavily on third-party providers of AI tools, with respondents using sectoral rules, DORA and the AI Act to address reliance on third-party providers.

The Report highlights that the above risks underscore the need for European insurance undertakings to adapt their risk management frameworks to address AI-specific challenges. However, the Report sets out that 49% of respondents have already developed dedicated AI policies, which constitutes a two-fold increase compared to data collected by EIOPA in 2023.

Next Steps

The Report highlights that there is a trend pointing towards a rapid increase in the adoption of AI tools in the European insurance sector in future years, with a shift from simple assisted tools to more sophisticated and autonomous systems. It notes that the emergence of Gen AI technology represents a significant opportunity for the European insurance sector to utilise AI systems to enhance internal process efficiency, reduce costs, and improve customer interactions.

The Report emphasises that EIOPA will continue to monitor the specific risks and benefits of the implementation of Gen AI systems for the market and customers, given the novelty and challenges of the new technology.

 

The EU’s Anti-Money Laundering Authority (“AMLA”) announced and published its first multi-year plan on 4 February 2026.

AMLA is the EU’s anti-money laundering authority which became operational on 1 July 2025 and whose full legal powers take effect from 1 July 2027.

The following key documents have been made available by AMLA:

• Single Programming Document 2026 – 2028 (the “SPD”), available here;
• AMLA’s explainer to the SPD, available here; and
• AML’s list of 2026 mandates, available here.

The SPD is AMLA’s first multi-year plan, setting out priorities and timelines as it moves from foundation to delivery. It contains AMLA’s work programme and provides a roadmap for the market.

The SPD provides an overview of scheduled mandates for 2026 and AMLA’s strategic objectives across three core deliverables:

• completing the Single Rulebook;
• advancing supervisory convergence; and
• strengthening cooperation among Financial Intelligence Units.

These are translated into action via five interlinked activities that will shape AMLA’s work in 2026 with an impact across the 3 years covered in the SPD:

1. delivering on core regulatory mandates;
2. advancing direct supervision;
3. operationalizing the FIU framework;
4. laying the foundations for indirect supervision and oversight; and
5. building AMLA’s risk frameworks.

AMLA’s roadmap for the market

AMLA continues its preparatory work to deliver effective outcomes with the principles of simplification in mind, prioritising areas that provide clarity and direction for the industry – including rules on customer due diligence and business relationships, and a consistent framework for supervisors across the EU. The SPD gives the market guidance for preparation and information on upcoming mandates, offering the opportunity for input via public consultations.

Scaling operations

In parallel, AMLA has confirmed it is scaling its organisation to support effective delivery. In that regard, it is growing its workforce, developing IT infrastructure and putting in place the structures needed to fulfil its mandate. With the 1 July 2027 date in mind, staff numbers are expected to grow from 120 at the end of 2025 to 432 by the end of 2027.

Keynote address by AMLA Chair

Bruna Szego, Chair of AMLA, recently delivered a keynote address on 22 January 2026 where he discussed the establishment of AMLA in the context of the EU’s comprehensive new Anti-Money Laundering and Countering the Financing of Terrorism (“AML/CFT”) package which was adopted in July 2024. In his address, he noted three key strengths of the AML/CFT package:

• harmonisation;
• a risk-based, proportionate approach; and
• AMLA’s supervisory model.

Bruna Szego’s full keynote address is available here.

On 30 January 2026, EIOPA published its January 2026 Insurance Risk Dashboard (the “Dashboard”).

The main findings in the Dashboard show that risks in the European insurance sector remain stable at a medium level, amidst an uncertain geopolitical environment weighing on the macroeconomic and market risk outlook.

The macroeconomic environment remains stable at a medium level, supported by continued GDP growth, easing inflation.

However, persistent and widening geopolitical tensions – most notably involving Venezuela, Iran, and emerging frictions around Greenland – are increasing uncertainty and rendering the outlook for trade, energy, and security increasingly complicated. At the same time, higher public spending needs, particularly for defence and infrastructure, may constrain fiscal space over the medium term.

Financial markets remain vulnerable to valuation pressures, with indicators continuing to point to potential detachment from fundamentals. While recent increases in volatility have been contained, the potential unwinding of an AI-related asset price bubble could amplify market fluctuations, even if this does not immediately translate into higher default risk.

Credit and liquidity conditions remain broadly stable, though funding dynamics show early signs of pressure amidst increased issuance and sustained refinancing needs.

The insurance sector continues to demonstrate resilience, supported by solid capital positions, stable profitability, and strong premium growth. Credit and liquidity conditions remain broadly stable. Nonetheless, geopolitical tensions, trade disruptions, and cyber events call for continued vigilance.

EIOPA’s announcement and summary of the Dashboard is available here and the full Dashboard can be found here.