DNB Livsforsikring’s escalation plan for higher life expectancy

Finanstilsynet (the Financial Supervisory Authority of Norway) received a letter from the Ministry of Finance Thursday 27 March 2014 in the evening issued guidelines for the escalation plans for reserve strengthening for higher life expectancy.

The letter contained information that surplus return in one contract cannot be used to strengthen reserves on other contracts (“non-solidarity-principal"). Likewise it said that life insurance companies should contribute at least 20 percent of the increased reserve strengthening. The Ministry said that the escalation plans for the life companies shall be determined so that the contribution from shareholders is reasonable, i.e. assumptions about at least 20 percent shareholder contribution and that the length of the escalation plans must increase for the shareholders contribution to remain unchanged.

With respect to provisions for higher life expectancy, DNB Livsforsikring has applied for a 15-year escalation period if the solidarity principle was not approved. A 15-year escalation period is expected to result in a shareholder contribution of approximately 20 per cent, which is roughly the same as if a 5­-year escalation period and the solidarity principle had been applied.

DNB Livsforsikring’s total reserve strengthening requirement is NOK 13.3 billion, of of which approx. NOK 5.5bn is reserved as of 31.12.2013. DNB Livsforsikring will come with further information when the escalation plans from Finanstilsynet are available.

For further information, please contact:
Anders Skjævestad, CEO, DNB Livsforsikring ASA, tel. (+47) 934 07403
Jan Erik Gjerland, Investor Relations, tel: (+47) 23 26 84 08