Denmark’s parliament, the Folketing, yesterday passed a new legislative act governing insurance and pension companies, which is specifically geared towards the sector in contrast to the current more broadly applicable financial law which includes banks.
Pensions sector association Insurance & Pension Denmark (IPD) welcomed the approval of the Insurance Business Act (Lov om forsikringsvirksomhed), which its members will come under in future, rather than having to obey the Financial Business Act (Lov om finansiel virksomhed).
Kent Damsgaard, chief executive officer of the Copenhagen-based lobby group, said: “For more than five years, we have worked for legislation that applies separately to the insurance and pension area. So this is a milestone.”
The bill was passed by Danish parliamentary parties on its third reading yesterday with no votes against.
Damsgaard said IPD’s statement yesterday: “Our companies are not banks”.
Despite this, he said pensions and insurance companies had hitherto been regulated in Denmark according to the same set of laws, which had caused them many problems and challenges.
“Even small pension companies have to spend a lot of resources on documentation requirements that have absolutely no relevance for them,” he said.
“And several elements of the ‘fit and proper’ rules have been made with a focus on the banks,” he said, adding that it had made no sense for the pensions and insurance industry to the same rules forced on them.
Damsgaard was referring to the ‘fit and proper’ guidelines on requirements laid down in financial legislation for the fitness and propriety of members of a board of directors and management board.
The Insurance Business Law is set to come into force on 1 January 2024.
IPD’s CEO said: “The law is clearer and simpler than the Financial Business Act, and we are convinced that the law will benefit the insurance and pension customers, the companies and the Danish Financial Supervisory Authority, which oversees our industry,” he said.
He also said he saw the new law as a clear recognition that the underlying EU regulation for the insurance and pension industry was different from the regulation of the banks.
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