The Danish FSA (Finanstilysnet) published its new rules requiring pension and insurance providers to account for their health and accident insurance businesses separately from their pensions activities yesterday – an announcement the industry largely welcomed, saying the watchdog had listened to its views.
The publication follows draft regulation put out for consultation in June, which was aimed at stopping pension firms – which in Denmark are mostly incorporated as life insurers – from making long-term losses on health and accident insurance.
While the FSA billed the new regulations as protecting the long-term sustainability of companies’ business models, it was responding to the Danish Competition and Consumer Authority’s conclusions that loss-making non-life insurance activities were distorting competition in the pension sector – where bundled bids are used to win company pension contracts.
Carsten Brogaard, deputy director at the FSA, said: “With the executive order, the Danish Financial Supervisory Authority sets new requirements for separate management of the company’s SUL [health and accident] business and life business in order to protect the interests of pension savers.
“In future, companies must have sustainable business models in both business areas, so that each business area rests on its own,” he said.
Kent Damsgaard, chief executive officer of IPD, said: “It is important that the SUL regulation does not lead to inappropriate detailed regulation of prices and products.”
So the lobby group noted with satisfaction, he said, that the FSA said company boards were still responsible for firms’ business models.
The group was also satisfied, he added, that the deadline for the companies to report to the watchdog was being increased to 14 weeks, and that firms ”with limited business scope and risks” could apply for exemption from reporting.
However, it also said the new SUL order still meant pension firms had to divide their businesses even though they generally supplied one product.
“IPD has raised a number of criticisms of the draft executive order, but acknowledges that the FSA has been responsive to the industry’s views,” the association said.
But the FSA had to make sure, it said in the statement, that the requirements were the same both for bundled and unbundled business models, so they competed on equal terms.
Last week, IPD announced its board had decided at an extraordinary general meeting to “modernise and simplify” its association structure, and adopted a new financial model which it said made it easy for members to assess the value of the membership – and bolster the board’s ability to set strategic priorities.
It said the new structure meant the association’s three main activities – interest representation, industry solutions and guarantee funds – would have separate finances in future.
Laila Mortensen, IPD chair and CEO of Industriens Pension, said the changes gave the digital industry solutions part of IPD a better opportunity to develop and adapt to members’ needs.
“And similarly, we can both strengthen and make visible the value of IPD’s political advocacy,” she said.
The lobby group announced yesterday that it hired a tobacco company lobbyist as its new head of public affairs.
Christian Vitting Gregersen, who is currently regulatory affairs manager at Philip Morris International, will be taking up the role on 1 January 2022, IPD said.