Activity of EEA insurance companies in Norway

1. Act of 27 November 1992 no. 111 on Choice of Law in Relation to Insurance
2. Act of 16 June 1989 no. 69 on Insurance Contracts with appurtenant regulations
3. Act of 9 January 2009 on Marketing
4. Act of 13 June 1980 no. 24 on Tax Assessment chapter 5. Please note that insurance companies are required to disclose insurance amounts etc. to the tax authorities. Queries relating to taxes should be directed to the Ministry of Finance
5. Act of 10 July 2005 no. 41 on Insurance Mediation and Regulations on Insurance Mediation of 9 December 2005 no. 1421 deal with insurance mediation
6. Act of 25 June 1999 no 46 on Financial Contracts and Financial Assignments (Financial Contracts Act). Agreements on loans issued to pension scheme members may fall under this Act
7. Act of 20 June 2003 on measures to combat the laundering of proceeds of crime etc. regulates activities in Norway
8. Act of 7 December 1956 on the Supervision of Credit Institutions, Insurance Companies and Securities Trading etc. (Financial Supervision Act) and appurtenant Regulations of 28 December 1993 no 1257 on the supervision of financial institutions and management companies headquartered in another EEA state and operating in Norway etc.

It should be noted that Norwegian legislation prohibits an insurance broker operating in Norway from receiving commission from insurance companies. Commission is to be paid directly by the policyholder. The prohibition, directed both at the insurance broker and the insurance company, is designed to prevent doubts as to the independent role of the broker. However, the prohibition does not apply to the mediation of insurance contracts written by EEA insurance companies which are not established in Norway, provided that the commission received from the insurance company is transferred to the principal (customer). 

An insurance company is obliged at all times, at the request of Finanstilsynet, to provide the information concerning its activities that Finanstilsynet needs in order to perform its supervision in accordance with the legislation applying in Norway.

II. Further legislation relating to life insurance activities in Norway

1. Norwegian legislation concerning the duty to give information to policyholders etc.

Provisions on information in the Act on Insurance Contracts
Act of 16 June 1989 no. 69 on Insurance Contracts chapters 2 and 11, sections 9-3 and 19-3, and appurtenant regulations laid down in accordance with section 2-3 and 11-4, apply to foreign insurance companies in Norway. The provisions concerned regulate the insurer's duty to provide information to policyholders and to the insured.

Provisions on information in the Insurance Act

1. Keeping of accounts: The Insurance Act sections 3-23 or 4-16 with appurtenant regulations relating to the keeping and statement of accounts, apply. A life insurance company is obligated to provide regular information to the policyholder as regards the financial status of the insurance contract. With regard to pensions, this legislation also applies to former employees with a paid-up insurance policy or a pension capital certificate.
2. Information to policyholders regarding elements of the adopted price tariff: Section 3-6 first subsection of the Insurance Act regarding the contents of the applied price tariff and payment of premiums applies. This provision requires the life insurance company to inform the policyholder about the various elements included in the calculation, and other terms or conditions of importance in the calculation of premiums.

Provisions of the pension acts on information to the employees
Act 24 March 2000 no 16 on Defined Benefit Occupational Pensions section 2-8 and Act 24 November 2000 nr 81 on Defined Contribution Occupational Pensions section 2-7 with appurtenant regulations of 22 December 2000 no. 1413 state what information the employer has to give to its employees. The insurance company is obliged to provide the employer with information enabling the employer to fulfil its information obligations towards the employees. The Acts now also contain information requirements on the keeping of accounts in defined contribution schemes and information on the consequences of the point in time chosen to draw pension benefits under the scheme. Act of 13 December 2013 no. 106 on Occupational Pensions (Hybrids) contains similar regulation.

Act of 27 June no 62 on Individual Pension Schemes section 1-6 states what information the pension provider (life insurer, bank, pension fund or a company which manages securities funds) has to provide to the customer/policyholder. Where the contract is an insurance contract, the above section supplements the information obligations of the Insurance Contract Act chapter II with appurtenant regulations.

2. Further provisions applying to foreign EEA life insurance companies

As mentioned above, sections 5-4 and 5-5 of the Financial Undertakings Act state which provisions of that Act and of the revised Insurance Activity Act apply to foreign EEA insurance companies and pension funds. Comments follow.

Transfer of funds accumulated under a pension scheme
Chapter 6 of the Insurance Act applies. This entitles the policyholder to transfer their life insurance contract. The same right applies to a former employee with a paid up insurance policy or a pension capital certificate. The right to transfer a contract implies the transfer of the funds accumulated under a contract to another life insurance company, pension fund, bank or securities funds management company. However, under the Act such a transfer simply entails termination of the contract and transfer of its assets to an equivalent contract established in another pension institution. This means that the receiving institution must be authorised to engage in the activity related to the contracts which are to be transferred. Life insurance contracts (including pension schemes) based on biometric risk can therefore not be transferred to a bank or a securities funds management company.

Furthermore Finanstilsynet takes the position that the right to transfer requires the receiving pension institution to have filed notification of cross-border activity into Norway. The right to transfer applies to any former employee with a paid up insurance policy or a pension capital certificate. Accordingly a paid-up policy can be transferred from one pension institution (life insurer or pension fund) to another life insurer, within the EEA jurisdiction. Section 6-13 regulates the transfer of a paid-up policy derived from an occupational pension scheme. A paid-up policy derived from a defined benefit scheme must in principle conform to the Norwegian Defined Benefit Pensions Act. This, in Finanstilsynet's view, implies that after a transfer of the policy conditions must be largely met by the new pension institution which again implies that all the benefits under the policy must be the same in the contract with the new life insurer. A life annuity policy cannot for instance be converted into a policy with limited benefits or to an index linked contract where the policyholder bears the investment risks. New legislation however permits retirement pension to be drawn under the policy (in accordance with sections 5-1, 5-7a to 5-7c of the above Act) when the policyholder is 62 years old (the retirement benefit should in these cases be recalculated on actuarial technical bases). A situation may arise where the accumulated funds transferred are insufficient to meet the actuarially expected costs of pensions payable by the receiving company. A precondition where paid up policies from a defined benefit pension scheme are concerned is that the policyholder should not be required to pay additional premium when transferring a policy to a new life insurer.  

3. Norwegian pensions legislation

The following acts with appurtenant regulations apply to occupational pension schemes (currently in Norwegian only):

• Act of 24 March 2000 no. 16 on Defined Benefit Occupational Pensions
• Act of 24 November 2000 no. 81 on Defined Contribution Occupational Pensions
• Act of 21 December 2005 no. 124 on Mandatory Occupational Pensions
• Act of 13 December 2013 on Occupational Pensions (Hybrids)

According to Regulations of 30 June 2006, life insurance companies intending to offer and provide defined contribution schemes for sponsors in Norway must notify Finanstilsynet. According to sections 4 and 6 of the Regulations, notification must contain further information about the product and the composition of the price tariff used for the schemes offered. The same applies to price tariff changes or other changes to the pension schemes product. Notification shall include a description of the product, and a description of mandatory insurance providing premium exemption during disability relative to the degree of disability.

Reference is also made to Act of 27 June no 62 on Individual Pension Schemes, in particular to chapter 4 concerning individual pension schemes attached to occupational pension schemes.

Comments to the legislation mentioned above
The Norwegian legislation must be interpreted in light of the EU general good doctrine and the home state’s exclusive right to regulate financial conditions. This is for instance the case for those provisions of Chapter 6 of the Insurance Act with appurtenant regulations that deal with the right to transfer a pension scheme with accumulated funds. For instance where the legal provisions regulating the right to transfer a pension scheme refer to different types of provisions (premium reserve, supplementary provisions, fluctuation reserves, claims provisions, risk equalisation fund) the law only addresses what types of provisions are to be transferred. The actual types and size of the provisions are determined by the legislation of the insurer's home state. A situation might occur where the accumulated funds transferred are insufficient to meet the actuarially expected costs of pensions payable by the receiving company. In this case, according to section 6-10 third subsection of the Insurance Act, the policyholder must make a contribution towards funding the shortfall (an exception applies as regards the transfer of paid up policies from a defined benefit pension scheme). Note that in this case the requirement is directed at the policyholder: it is not the intention to regulate the provisions as such of foreign EEA insurance companies. Reference is also made to the provisions concerning accumulated profit mentioned above.

III. Further legislation relating to non-life insurance activities in Norway

1. Provisions in the Insurance Act

As mentioned above, sections 5-4 and 5-5 of the Financial Undertakings Act state which provisions of that Act and of the revised Insurance Activity Act apply to foreign EEA insurance companies and pension funds.  Comments follow.

Claims for damages reported to an agent
Section 7-3 second subsection of the Insurance Act applies. This clarifies that a claim for damages reported to an insurance agent shall be considered as having been reported to the insurance company.

Information to the policyholder
Section 7-7 first subsection second sentence of the Insurance Act applies. This provision requires the insurance company when requesting premium payments to inform the policyholder of what elements are included in the calculation of the premium, and of other terms or conditions of importance when calculating premiums.

2. Non-life insurance guarantee schemes

Reference is also made to chapter 20 of the Financial Undertakings Act on guarantee schemes and appurtenant regulations. According to section 20-3 a branch of an insurance company with its head office in another EEA state, and carrying on non-life insurance activities in Norway, must be member of the Norwegian non-life insurance guarantee scheme.

3. Mandatory non-life insurance etc.

A number of specific provisions apply to the various mandatory types of non-life insurance policies. Reference is made to the classes listed under Annex I to Directive 2009/138/EEC. The following list of provisions concerning mandatory non-life insurance is not exhaustive. Workmen’s compensation insurance (Classes 1 & 2)

Companies providing mandatory insurance against accidents and sickness at work (workmen’s compensation insurance) must under Act of 16 June 1989 no. 65 on Occupational Injury Insurance satisfy the following conditions:

1. The policy terms and conditions must be forwarded to Finanstilsynet prior to such cover being offered.
2. The policy terms and conditions and all other information relating to the insurance contract must be translated into Norwegian.
3. All correspondence with Norwegian employees on matters related to the company’s liability must be in Norwegian.
4. Norwegian employees may require payment of compensation in Norwegian currency (NOK).
5. The company must be a member of "Yrkesskadeforsikringsforeningen" (the Norwegian Occupational Injury Insurers' Bureau). The main purpose of this organisation is to cover claims from employees that are not covered by insurance pursuant to section 7 of the Act on Occupational Injury Insurance.

Yrkesskadeforsikringsforeningen (the Norwegian Occupational Injury Insurers' Bureau) has the following address: PO Box 2551 Solli, 0202 Oslo. Tlf.: +47 22 04 86 00.

Insurance contracts covering damage caused by fire (Class 8)
According to Act of 16 June 1989 no. 70 on Natural Perils Insurance, all insurance contracts covering damage caused by fire must also include coverage against natural perils. Furthermore, all insurance companies underwriting fire insurance in Norway must be member of Norsk Naturskadepool (Norwegian Natural Perils Pool), and must charge a fee for each fire insurance policy (a specified percentage of the sum insured). This fee shall cover the compensation scheme's expenses associated with damages caused by natural perils. Losses due to natural perils are distributed between the companies in proportion to each company’s overall fire insurance premiums, i.e. as a pool. The pool is administered by Norsk Naturskadepool. Additional provisions relating to the obligations and rights of member companies are set forth in the Act on Natural Perils Insurance with appurtenant regulations.

Norsk Naturskadepool has the following address: PO Box 2529 Solli, 0202 Oslo. Tlf.: +47 23 28 42 00.

Motor vehicle third party risks (Class 10)
Reference is made to the Protocol relating to the collaboration of the supervisory authorities of the member states of the European Union ("Sienna Protocol") as regards motor vehicle third party risks (class 10, not including carrier’s liability). According to the Act of 3 February 1961 on motor insurance liability, and regulations laid down pursuant to that Act, as regards motor vehicle third party liability, a company intending to provide mandatory insurance against motor vehicle third party liability must meet the following conditions:

1. The company must be a member of "Trafikkforsikringsforeningen" (The Norwegian Motor Insurers’ Bureau).
2. The supervisory authority of the company’s home member state must communicate to Finanstilsynet a declaration of the undertaking’s membership of the Norwegian Motor Insurers’ Bureau, and the name and address of the company’s representative in Norway.

The company must have a representative residing or established in Norway with authority to handle claims, grant compensation to injured parties, and to represent the company before Norwegian courts of law or authorities. Finanstilsynet's premise is that the general agent (or the person authorised to represent the general agent) will hold such authority and position in Norway unless otherwise communicated.

Trafikkforsikringsforeningen has the following address: PO Box 2551 Solli, 0202 Oslo. Tlf.: +47 22 04 86 00.

Insurance against liability related to medicinal products (Class 13)
Mandatory insurance against liability related to medicinal products is regulated in chapter 3 cf. section 3-4 of Act of 23 December 1988 no. 104 on Product Liability. The policy terms and conditions must be forwarded to Finanstilsynet prior to their application.

Reference is also made to section 7-7, cf. section 7-6, of Act of 16 June 1989 on Insurance Contracts concerning the position of the injured party under liability insurance. This provision states that where an insurance contract refers to mandatory liability insurance and the contract is terminated or otherwise ceases to apply, the injured party will retain cover under the contract for one month after the relevant authority received notification of the matter.