FINLAND - The Finnish government has submitted a legislative proposal to merge the country's Financial Supervisory Authority (FIN-FSA) with the Insurance Supervisory Authority.
This would create a single body responsible for the oversight of credit, insurance and pension companies.
The entity is intended to start operations on 1 January 2009. One of its first tasks will be to determine whether the responsibilities of the insurance supervisory authority - including the supervision of the Finnish Centre for Pensions - can be assigned to other authorities.
According to the proposal, which was scheduled for presentation to parliament today, the Ministry of Finance will be responsible for presenting the authority's matters in government.
The plan to integrate the two organisations is based on a report by the Finnish financial supervision working group in February, which suggested the merger would "secure the rights of the insured and foster overall public confidence in financial market operations".
It is intended that the duties of the new supervisory authority would be "essentially the same as those of the two existing authorities", including supervision of the financial market activities of "supervised entities" and responsibility for promoting compliance with good practice and distributing general information about financial markets.
The proposal also suggests that once the new supervision authority has been set up, "prompt action should be taken to identify which tasks of the existing Insurance Supervisory Authority involving social insurance implementation and administration can be assigned to other authorities".
These include the supervision of the Finnish Centre for Pensions - which is the central body of the statutory earnings-related pension scheme - and guidance and supervision in the execution of unemployment benefits as well as endorsement of the budgets of the Pensions Appeal Board.
The existing Parliamentary Supervisory Council will oversee the "expediency and efficiency" of the new authority, and would form part of the governing body alongside the council appointed board and director general of the new authority.
However, the board is expected to consist of five members, one of which would be appointed by the Ministry of Finance, one by the Ministry of Social Affairs and Health, and one by the Bank of Finland.
The main task of the board is intended be the establishment of specific objectives for the operation of the new organisation, including operating guidelines. However, it may also "deliberate and rule on matters that might significantly impact the stability or functioning of the financial markets", although the extent of the new body's sanctions and powers would remain the same as the existing authorities.
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