The Norwegian Financial Supervisory Authority has published a supervisory report on an inspection of Storebrand Forsikring AS covering governance and control arrangements, risk exposure, and capitalisation. While the firm’s explanations were largely noted, the report sets out multiple findings and follow-up requests, with particular scrutiny of Solvency II methodologies and the board’s role in key decisions. The review highlights gaps in product oversight, including unclear criteria for when product changes should be escalated to the product governance committee or the board, and expectations that product testing is treated as a mandatory part of product approval. Finanstilsynet also examined remuneration and conflicts of interest for external agents and partner agreements, noting that agents are not subject to the firm’s remuneration guidelines and identifying a partner arrangement allowing remuneration up to 2.0% of annual net premium, with an expectation that commission-related information is provided in customer offer documentation. On organisation and outsourcing, the report questions whether group outsourcing to Storebrand Liv adequately separates first-line execution from second-line control and calls for regular, documented conflict-of-interest assessments, while also pointing to weaknesses in solvency reporting that contributed to frequent capital transfers from the group and the need to ensure risk management resources are adequate. In risk measurement, Finanstilsynet disputes that the firm has substantiated full use of the loss-absorbing capacity of deferred taxes, describing post-loss projections as unrealistic and insufficiently grounded in conservative and transparent assumptions, tax constraints, and the impacts of a severe loss on pricing, profitability, demand, and reinsurance. The report is also critical of the firm’s use of the volatility adjustment without a formal board decision and without analyses expected under Solvency II rules, and it seeks the relevant analyses and a board-approved policy. Additional expectations cover documentation of the board’s assessment of whether an extraordinary ORSA should be performed, and improvements to investment strategy documentation, including permitted asset classes and markets, management of derivative risks embedded in funds, concentration considerations including a 51% exposure to Norwegian bank sector bonds, reliance on a single manager and fund, and clarity on return targets where two benchmarks are referenced. Finanstilsynet requests the board meeting minutes where the supervisory report is handled and asks the firm to share the letter with its auditor, alongside submission of updated assessments on deferred tax loss absorbency and the volatility adjustment framework.
Norwegian Finanstilsynet 2025-06-11
Norwegian Financial Supervisory Authority challenges Storebrand Forsikring’s Solvency II assumptions and board oversight in supervisory report
The Norwegian Financial Supervisory Authority published a report on Storebrand Forsikring AS, highlighting deficiencies in governance, risk management, and Solvency II compliance. Issues include unclear product oversight criteria, inadequate remuneration guidelines for external agents, and insufficient substantiation of deferred tax loss absorbency. The report calls for improved documentation, board-approved policies, and regular conflict-of-interest assessments.