SWEDEN – Swedish financial regulator Finansinspektionen says a small number - less than 1% - of life insurance and occupational pension assets were in a “red-light” situation in the first quarter.

The so-called traffic-light system is the FI’s stress test for financial risks. It said the measurement “gave expected results” and that it would have a marginal effect.

“Life insurance companies and occupational pension funds that together hold less than 1% of the industry’s assets reported a red light in the first quarter’s traffic-light measurement,” FI said.

However, even 1% of the SEK1,700bn (€182bn) which FI says the industry is worth, still amounts to €1.8bn.

The FI would not name any of the institutions that had received the red-light warning unless they were sanctioned. Spokeswoman Helena Östman declined to provide the number of institutions in the situation.

The new traffic-light model, which measures life insurance companies and occupational pension funds’ exposure to financial risk, came into force at the start of the year.

The objective is to identify companies at an early stage that have such high levels of risk exposure that they cannot with sufficient security fulfill their commitments to customers. The model will be evaluated during 2006.

The model will be expanded to cover non-life insurers as of 2007.