SWEDEN - Swedish pension funds can withstand "further fluctuations" in the financial markets, according to the latest update from the Finansinpektionen's (FI) 'traffic-light' model. 

The Swedish Financial Supervisory Authority revealed no pension, life insurance or non-life insurance company received a red light in the traffic-light model in the first quarter of 2008.

Instead, it claimed pension companies have shown themselves to have a "buffer" for further turbulence in the financial markets and they "have a good capacity to fulfil their commitments to customers".

The FI revealed 188 insurance companies had filed reports in the first quarter - based on figures to March 31 2008 - including 15 occupational pension funds, and 45 life insurance companies.

This was slightly lower than in the fourth quarter of 2007, when 318 reports were filed, although number of pension and life insurance companies filing date remained the same at 60. (See earlier IPE story: Pensions get 'green light' over market turbulence)

Although the FI said no company was classed as a "red light" risk, the exception is the pension fund Prometheus, which has been in the red light zone since 2006 and has been ordered by the FI to modify its investment risk.

The FI's traffic-light model measures insurance companies' sensitivity to extreme price fluctuations on the financial markets and the risks suggesting firms will incur larger costs than expected, with the aim of identifying early those companies that do not have "sufficient security" to fulfil their commitments to customers.

A full report on the entire traffic-light model for the second quarter of 2008 is scheduled for publication on September 4 2008, followed by an update on the financial risks to companies in the third quarter on November 13 2008.

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