The Norwegian Financial Supervisory Authority has published a report from its on-site inspection of Frende Skadeforsikring AS in June 2025, reviewing the firm’s governance and control framework, risk exposure and capitalisation. The findings set expectations for a more robust and binding solvency capital coverage target, improved ORSA stress testing and clearer risk appetite limits aligned to the insurer’s growth and increasing complexity. The report challenges the firm’s current solvency capital coverage target as unclear and insufficiently binding where it is measured “over time”, and expects the board to set a higher solvency capital coverage target alongside higher risk appetite and risk tolerance limits, with earlier management actions before the solvency position deteriorates. It also calls for stress factors in the 2025 ORSA to reflect extraordinary events and questions the realism of key projection assumptions, particularly the loss ratio. Additional governance and control expectations include establishing a coherent link between overarching objectives and underlying risk metrics, adopting insurer-specific conflict-of-interest guidelines and a register of identified conflicts, strengthening the outsourced actuarial function’s resourcing and independence, and enhancing the capacity and structure of second-line oversight, including separating risk management and compliance functions as capacity increases. Finanstilsynet also flags documentation shortcomings for the use of the loss-absorbing capacity of deferred tax, indicates it will follow up claims reserve adequacy given continued run-off gains and requests the 2025 actuarial report, and raises conduct and profitability issues tied to discounts and a new distribution and commission model, as well as deficiencies in customer disclosures where documentation does not clearly identify the contracting insurer. For follow-up, Finanstilsynet requests the minutes from the board meeting at which the report is considered and asks that the report be shared with the external auditor, while noting targeted supervisory follow-up on the deferred tax analysis and claims reserves.
Norwegian Finanstilsynet 2026-04-17
Norwegian Financial Supervisory Authority publishes Frende Skadeforsikring inspection report and presses for higher solvency targets
The Norwegian Financial Supervisory Authority has published findings from its June 2025 on-site inspection of Frende Skadeforsikring AS, requiring a more robust solvency capital coverage target, enhanced ORSA stress testing and clearer risk appetite limits. The authority also expects stronger governance and control frameworks, including improved links between objectives and risk metrics, reinforced actuarial and second-line functions, better documentation of loss-absorbing capacity of deferred tax and claims reserves, and remediation of conduct and disclosure deficiencies related to discounts, distribution models and identification of the contracting insurer.