Finland’s Financial Supervisory Authority (Fiva) has refrained from giving Elo Mutual Pension Insurance a public warning for misconduct, but has reprimanded the company for some of its practices in 2013, Elo announced this week.
Earlier this autumn, the supervisory authority investigated whether the managing director and board members of Local Tapiola Pension failed to abide by the local law on mutual pension insurance companies in 2013.
Local Tapiola Pension was the predecessor of €19.4bn Elo Mutual Pension Insurance, launched together with Pension Fennia on 1 January 2014.
The case was publicised initially by local news daily Helsingin Sanomat.
The authority was investigating whether Local Tapiola Pension’s retirement funds were transferred to Local Tapiola’s non-life insurance company using overpriced service contracts.
The mutual pension insurance company bought technical and personnel services from the other companies of Local Tapiola Group over 2013, as it did not have the necessary networks and technology of its own.
The authority was also investigating whether Local Tapiola Pension provided the watchdog with all relevant information regarding these liabilities, before merging with Pension Fennia.
The end result of the investigation was that the authority refrained from giving Elo a public notice, but simply criticised the firm for some of its procedures in 2013.
Satu Huber, Local Tapiola Pension’s managing director in 2013, who is currently the deputy managing director at Elo, said the criticism focuses by and large on business decisions taken in 2013.
“Fiva says some of our service contracts with other parts of the Local Tapiola group should have been cancelled before the merger was confirmed,” she told IPE.
“But how realistic doing this would have been before the merger … is another matter. The board and all parties were also aware of all the service contracts.”
Huber believes a misunderstanding lies behind the investigation.
“The media activity around this issue clearly discounted the fact that reports and investigations like this are the routine work of Fiva,” she said.
”However, we are taking the authority’s criticism seriously. Elo’s board will convene in the near future to discuss the issue.”