EUROPE - Internal market commissioner Michel Barnier is this Friday expected to announce a consultation on quantitative impact studies (QIS) for the holistic balance sheet, according to sources familiar with the matter.

According to two sources, Barnier will make the announcement during a keynote speech in Amsterdam at a conference held by Insurance Europe - the insurance and reinsurance federation previously known as CEA.

The consultation paper will detail the points EIOPA intends to assess in the QIS to implement the holistic balance sheet approach, a crucial element of the proposed revised IORP Directive, and the participants involved in the QIS process.

One source based in Brussels said Commission staff were expecting the announcement to be made tomorrow as the report "[had] been on the commissioner's desk for quite some time now".

The same source added that the launch of the consultation paper on the QIS could take place either on 8 or 15 June.

A spokeswoman for Commissioner Barnier declined to confirm or deny the launch of the consultation, saying his keynote would likely give further details of the consultation's format. She did not provide any details on the timetable.

Earlier this month, IPE reported that the European Insurance and Occupational Pensions Authority (EIOPA) was planning to publish a consultation paper on a quantitative impact study of the 'holistic balance sheet' proposal by mid-June.

The news means EIOPA will be likely to postpone releasing the results of the study on the proposal for the IORP Directive.

Under the plans originally set by the Commission, the European authority was expected to launch the QIS in early May, with a view to publishing its results at the end of September.

The Commission was hoping to introduce a draft version of the new Directive before the end of this year.

The industry has consistently voiced its concerns over the "tight" timescale the Commission had imposed, arguing that the implementation of the revised IORP Directive was a "serious" matter that Brussels should consider in greater depth.

Announcing the launch of the consultation process at the Insurance Europe conference looks controversial since the insurance industry has been pushing for Brussels to introduce Solvency II measures within the revised IORP Directive.

At a public hearing on the IORP Directive in Brussels in March, Michaela Koller, director general of Insurance Europe, said that, in terms of competition, the exemption of Solvency II measures granted to pension funds could lead to arbitrage problems.

"If you look at [a] market where there is high competition, you need to look at level playing field issues because if you are not addressing these issues, you create arbitrage market problems," she said.

Koller mentioned the case of Sweden where insurers operate under article four of the IORP directive, which allows them to opt in to the IORP Directive.

"There is therefore direct competition between insurers and IORP pensions," she added. "After the adoption of Solvency tools and if the IORP Directive remains unchanged, foreign IORPs will be in the position to enter the Swedish market and use different instruments. This will lead undoubtedly to distortion of competition." 

Koller also made a similar comparison with France where the same situation will apply, according to her, with foreign IORPs entering the French market under different rules, while French IORPs will have to comply with the same Solvency II measures.

"In order to achieve fair competition, Insurance Europe supports the idea of applying the principle of same-risk, same-rules, same-capital for all institutions providing pension provision," she concluded. "Therefore, Solvency II principles should be taken as a benchmark."
 

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