Insurance and pensions

Supervision

Finanstilsynet's supervision of insurance and pension undertakings is risk-based. Supervisory activities in 2023 were prioritised on the basis of reporting from the undertakings, analyses of risks and vulnerabilities and signals received by Finanstilsynet about undertakings and markets. At an inspection, Finanstilsynet reviews the undertaking’s management and control system, including strategies and guidelines, organisation, monitoring and reporting, as well as its risk level and capitalisation. Some inspections also focus on special topics or risk areas. Relevant topics at inspections in 2023 were market risk, insurance risk, technical provisions, ICT risk, anti-money laundering and the use of artificial intelligence.

Finanstilsynet conducted inspections at four life insurers in 2023. One of these focused on customer protection, one was an ICT inspection, and two were general inspections. Inspections were carried out at two pension funds and seven non-life insurers.

Finanstilsynet conducted inspections on the topic of consumer protection at two insurance intermediaries, one insurance broker and one insurance agent.

Two non-life insurers have received approval of partial internal models for calculating the solvency capital requirement. The models are followed up through reporting, meetings and inspections. Applications for model changes were also processed in 2023.

Finanstilsynet cooperates with other national financial supervisory authorities on the supervision of international insurance groups. Finanstilsynet heads such supervisory colleges for Storebrand and Gjensidige and also participates in four other supervisory colleges. There is also ongoing cooperation with other countries' supervisory authorities concerning foreign branches and operations outside the EEA. In 2023, Finanstilsynet entered into an agreement on supervisory cooperation with the supervisory authority in Bermuda.

Analysis and monitoring

Finanstilsynet receives extensive reporting from insurers, pension funds and insurance intermediaries. Based on a specific assessment, extraordinary reporting requirements are imposed on vulnerable undertakings. The reporting forms an important basis for the supervision of the undertakings.

In 2023, we published a number of reports that are available on Finanstilsynet's website:

• quarterly reports showing the profitability and balance sheet composition of life insurers and non-life insurers
• quarterly reports on the solvency situation of financial institutions etc., including both insurers and pension funds (pension funds are included every six months).
• semi-annual reports showing the profitability and balance sheet composition of pension funds
• semi-annual reports on pension funds’ solvency situation
• annual supplementary reports on insurers’ solvency situation

Finanstilsynet conducts ad hoc analyses of risks in undertakings and markets when considered relevant. In 2023, we mapped the effects of various extreme weather events and how they affected the solvency of the undertakings. We also surveyed the reinsurance market for insurers on the basis of signals that it had become more challenging to enter into reinsurance agreements.

Finanstilsynet also conducted analyses of the undertakings' exposures to US and Swiss banks and other types of risk exposures. The analyses were partly based on the undertakings' own risk and solvency assessment (ORSA).

Licensing and other administrative matters 

In 2023, two pension funds were granted permission to wind up their operations, and two pension funds were given permission to merge.

In 2023, Finanstilsynet granted 180 undertakings permission to act as insurance intermediaries.

Finanstilsynet assessed the fitness and propriety of insurers' board members and managers in connection with the establishment of new undertakings and changes in the boards and management of established undertakings.

Finanstilsynet processed 101 notifications of outsourcing of ICT deliveries in 2023.

Emergency preparedness and crisis management

Finanstilsynet is prepared to handle crises in both individual undertakings and the markets. The purpose of supervision is to prevent such crises. 

In 2023, Finanstilsynet closely monitored certain insurers with weak solvency and inadequate management and control of their operations.

Finanstilsynet acts as secretariat for the Non-Life Insurance Guarantee Scheme. In 2023, the Storting (Norwegian parliament) decided to make advance compensation payments to claimants covered by insurance contracts entered into on a cross-border basis with the Danish insurer Alpha Forsikring A/S. The Guarantee Scheme has been tasked with administering these payments, which are expected to be made in 2024.

Regulatory development

Pension institutions’ treatment of management fees for placing client assets in mutual funds

With respect to life insurers and pension funds (hereinafter referred to as pension institutions), price tariffs and premium rates shall include the total amount to be paid by the policyholder under the insurance contract, including the price for the management of policyholders’ funds. According to the Ministry of Finance, it is necessary to clarify how fees for the management of policyholders’ funds in mutual funds and alternative investment funds should be treated in accordance with the provisions on price tariffs and profits in the Act on Insurance Activity. The Ministry therefore asked Finanstilsynet to propose regulatory amendments. In December 2023, Finanstilsynet sent a proposal to the Ministry of Finance to clarify in regulations that pension institutions' fees for managing policyholders’ funds in the collective portfolio shall include fees to fund managers. The proposal applies to guaranteed products and corresponds to the rules that apply to defined-contribution pension schemes.

Buffer fund for private guaranteed pension products

New rules on a buffer fund for private guaranteed pension products entered into force on 1 January 2024. The buffer fund will replace the current supplementary provisions and fluctuation reserves and be allocated to the policyholders and can be used to cover negative returns. Corresponding changes were introduced for municipal pension schemes with effect from 2022. The changes are intended to promote competition in the market for such pension products and help generate higher expected returns. Providers of such products will have greater scope for risk-taking in their fund management activities, while their clients’ guaranteed return is still safeguarded. In December 2023, Finanstilsynet sent an identical letter to all life insurers, underlining that changes in the management of collective portfolios aimed at raising expected returns are required to ensure that the regulatory changes will benefit clients.

PEPP (Pan-European Pension Product)

In November 2023, the Ministry of Finance circulated for comment a proposal from Finanstilsynet on how the EU rules on a pan-European pension product could be implemented in Norwegian law. PEPP is an individual, non-labour market related pension product. No undertakings are required to offer the product, but only products registered under these rules may be marketed and distributed in the EEA under the designation ‘PEPP’.