Finland’s financial services watchdog has decided to prolong its close monitoring of Elo, after the pension provider breached solvency rules last year, extending the arrangement whereby a lawyer is physically monitoring the pension insurance company’s management and board activities on behalf of the supervisor.
Elo, one of the four pension insurers in Finland’s earnings-related pension system, said: “Elo Mutual Pension Insurance Company has, on 9 June 2021, received a decision from the Financial Supervisory Authority (FIN-FSA) regarding the continuation of the appointment of Pekka Jaatinen, attorney and Master of Laws with court training, as the authorised representative for Elo.”
It said Jaatinen had served as the authorised representative of FIN-FSA since 14 December 2020.
“The authorised representative supervises Elo’s operations and acts as a representative of the FIN-FSA in the meetings of the board of directors and the executive group, but he will not take part in decision-making,” the pension provider said.
“Over the past year, the company has taken several actions to strengthen the operational models and expertise of the company’s management,” Elo said, adding: “This work will continue determinedly through successful co-operation with the supervising authority and its authorised representative.”
Elo said Jaatinen’s activities would not affect the company’s daily operations or its insurance provision or investment activities, and that its solvency was at a “highly secure level”.
“The insurance policies and pensions of Elo customers are being managed well,” the company said.
FIN-FSA would reassess the need for the authorised representative no later than April 2022, Elo said.
According to Elo’s latest interim report, its solvency ratio rose to 125.0% at the end of March from 123.7% at the end of December, although this was still lower than the other three pension insurance companies in the system.
In April, Carl Pettersson took over as chief executive officer of Elo, a month after the sudden departure of CEO Satu Huber.
The FSA said in December that the appointment of an authorised representative to supervise activities at an entity was permitted in cases where, for example, there was “evidence of incompetence or carelessness in the management of its affairs”.