The European Insurance CFO Forum, the group of European chief financial officers at insurance companies, slipped out a statement on QIS5 last week that was cunningly disguised and therefore attracted little attention despite the flurry of coverage sparked by the EC's call for participation in the exercise.
The group welcomed the European Commission's recently issued fifth quantitative impact study that CEIOPS will use to fine tune its final Solvency II proposals.
The CFO Forum joined others such as the CRO Forum and CEA in a call to the industry to take part in the study to ensure, as it stated, that a "clear picture will be developed of the appropriateness and feasibility of the solutions and options set out in the QIS5 proposals by the Commission and whether they would allow the finalisation of the implementing measures of Solvency II."
This, one can presume, is classic CFO-speak for: "Let's make sure the bureaucrats in Brussels are given some sensible advice."
The group then slipped into the standard model for industry reactions to news from CEIOPS and the EC.
That means it first expressed its support for the principles of Solvency II as "a means to introduce a consistent economic, risk based solvency approach to insurance regulation reflecting the industry's business model."
It did, however, break a little from the standard PR model reaction to Solvency II news by slipping in the perhaps telling words as â€œset out in the Level I Directive as it welcomed the "overall principles" of the thing.
This suggests to this observer that, as with most others in the industry, the group would only really welcome the new rulebook if the Commission is sensible enough to rein in CEIOPS' recent excesses and return to what was actually intended in the Framework Directive, not least a proportional approach that would not really mean the industry would need a great deal more capital.
After welcoming the principles of the Solvency II Directive the standard press release model from industry groups is to then point out that, while they like the idea, there are a number of important details that need to be supported out before it is really acceptable. The CFO Forum did not disappoint.
"A number of outstanding industry concerns remain to be addressed in order to achieve a balance that will result in continued consumer protection, support financial stability and, at the same time enhance the competitiveness of the European insurance industry so that it can contribute to the overall economy, by offering risk protection for an appropriate cost to its customers," it stated.
This one can surely translate as meaning that CEIOPS has allowed itself get carried away because of wider fears and ignorant political pressure over the financial crisis and come up with a much more prudent set of proposals than is really needed. This is not the banking industry after all.
The CFO Forum joined many other industry groups, not least the industrial buyer lobby represented by Ferma, to point out that the problem with this conservative approach is that excess capital requirements would simply raise the cost of capital and therefore force insurers to increase the price of cover to individuals and business.
This would actually mean that Solvency II would make the European insurance industry a much safer but much less competitive marketplace and the European economy would suffer as a result.
"Calm down CEIOPS and sort it out before you shoot the industry and the wider economy in the foot," would have been a more direct way of saying that, perhaps.
The chair of the CFO Forum, Dieter Wemmer, decided to choose more diplomatic words as he concluded: "As the leading EU Insurance companies, we recognise the need for a robust regulatory regime and in particular that companies retain adequate solvency capital based on realistic, consistent and market based risk assumptions consistent with the principles set out in the Level I Directive.
"While welcoming the QIS5 exercise as a step in the finalisation of the implementation, we are still concerned that some of the proposals in QIS5 do not reflect these principles and, if implemented as currently proposed, could be damaging to the industry and its customers."
Note the reference to the Level I Directive again which will presumably be the root of the industry campaign to persuade the Commission to reject CEIOPS' more excessive proposals and calm it down again.