The Financial Supervisory Authority of Norway has published an on-site inspection report on Gjensidige Pensjonsforsikring AS covering governance and control, asset management, insurance operations, customer handling, technical provisions, risk exposure and capitalisation. The report assesses the firm’s solvency capital coverage as low and identifies shortcomings spanning capital management, risk governance, outsourcing oversight and customer-protection processes for insurance-based investment products. Solvency capital coverage fell sharply in the fourth quarter of 2023 and was below the firm’s internal level for considering measures. The board attributed the decline mainly to increased reserves for child disability pensions, considered owner capital injection but decided to await developments as forecasts pointed to improvement in 2024, and the ratio has increased somewhat during 2024. Even so, as of 30 September 2024 the firm still had by far the lowest solvency capital coverage among Norwegian life insurers. Supervisory observations also included questions over the adequacy of internal capital targets and action triggers, the need for more concrete and evidenced capital contingency planning and ORSA conclusions, and expectations for stronger board-level control of risk appetite across all material risks including sustainability risk. Finanstilsynet also challenged aspects of investment management where the balance between customers’ interests and shielding equity was not sufficiently clear, and raised issues on product governance, suitability documentation and disclosures for insurance-based investment products, and complaint handling. Finanstilsynet expects the announced remediation to product governance and investment-advice processes to be implemented by the end of the first quarter of 2025. It also requested a quantified assessment of the solvency effect of modelling simplifications related to amortised-cost bond exposures by the end of March 2025, noting that simplifications that systematically understate technical provisions cannot be used.
Norwegian Finanstilsynet 2025-01-22
Financial Supervisory Authority of Norway reports low solvency and multiple control weaknesses at Gjensidige Pensjonsforsikring
Norway's Financial Supervisory Authority's report on Gjensidige Pensjonsforsikring AS highlights low solvency capital coverage and deficiencies in capital management, risk governance, and customer protection. The firm had the lowest solvency capital coverage among Norwegian life insurers as of September 2024. Finanstilsynet expects improvements in product governance and investment-advice processes by Q1 2025 and a quantified assessment of solvency effects from bond exposure modelling by March 2025.