Norwegian FSA with proposals to new product legislation for life and pensions

In a press release 10 March 2011, the Norwegian Financial Supervisory Authority (FSA) sums up their proposals to new product legislation for life and pensions in Norway. The main summary points seen from Storebrand`s perspective are as follows:

Proposals for building flexible customer buffers

The Norwegian FSA proposes to implement a new flexible customer buffer fund, replacing today's division between additionally statutory reserves (ASR) and the market value adjustment reserve (MVAR).  The fund will also be available for covering negative returns. Further, the FSA proposes an obligation to build the new customer buffer fund to be more than 10% of the customer reserves, anything above 15% shall be allocated to the customers on a definite basis. The customer buffers fund shall be build using policyholders excess return and will not affect profit to shareholders.

The Norwegian FSA proposes that the new rules applies to both the active fee based defined benefit portfolios and the paid up policies.

For paid up policies with profit sharing rules, the FSA proposes several alternatives for profit split between customer and owner. One alternative being a profit sharing split of 90/10, but with a profit split before allocation to customer buffer fund. Today allocation to customer buffer fund is done before profit sharing.

Evaluation of end guarantees

The Norwegian FSA does not propose end guarantees.

Proposal for voluntary conversion from paid up policies to capital certificates without guarantees

The Norwegian FSA has proposed that customer can convert paid up polices and guaranteed individual products to individual unit linked capital certificates without guarantees.

Storebrand consider today's proposals as positive and constructive contributins in the ongoing process to alter the Norwegian product legislation.

The proposals regarding changes in build up and utilisation of buffer capital is considered beneficial for customers and owner, it creates increased flexibility and enables a long term perspective in the management of customer assets.     

Lysaker, 10 March 2011

Contact persons:

EVP Corporate Communications Egil Thompson: Mobile (+47) 93 48 00 12

Head of Investor Relations Trond Finn Eriksen: Mobile (+47) 99 16 41 35

This information is subject of the disclosure requirements acc. to §5-12 vphl (Norwegian Securities Trading Act)