Finnish regulators clarify legal positions
FINLAND – A working committee set up by the ministries of finance and social affairs and health has suggested amendments to the current law governing the Finnish insurance supervisory authority (VVV) and the financial supervisory authority (RATA), in response to blurring divisions between Finnish insurers and asset managers.
The committee, however focused solely on regulations and did not discuss recently aired plans over whether the two authorities should merge, according to Juhani Turunen, a senior officer of the Ministry of Social Affairs and Health (STM).
“ This committee did not take a stand on the debate of merging the authorities, it only considered the supervisory regulations. How this will be organised will be debated by Markku Lehto, permanent secretary at STM, and Rauli Sailas, permanent state secretary at the Ministry of Finance (VM), in the autumn,” says Turunen.
Finnish authorities are also considering the issue of supervisory regulation in a wider international context, particularly as the country’s pensions systems is markedly different to that in other European countries.
“ The integration issue has been discussed in the EU member states and in other countries. In Finland the insurance industry is different to the other EU systems because pension insurance is a mandatory system that is being run by private insurance companies, which is something the other countries don’t have,” says Turunen.
“ This brings social insurance into the equation, which is why the insurance market is under the governance of the ministry of social affairs and health.”
Mergers between asset managers, insurers and retail banks have sparked the introduction of amendments to the Finnish law, hence the working committee report concludes that the new proposed regulations should be enforced as soon as possible.
The main point of the amendment is to clearly define the role of the supervisory bodies in cases where individual companies act in both financial and insurance industries, a situation which has become more pertinent following the merger between the former state postal service bank Leonia, insurance company Sampo and investment manager Mandatum, and the subsequent fusion of insurance company Pohjola and investment manager Conventum.