FI has identified a number of quantitative indicators that point toward factors in the insurance sector that could have an effect on financial stability. These indicators show that there was good resilience in the insurance sector at the end of the year.
FI has observed deficiencies in the insurance undertakings' practical management of surplus and in their internal guidelines for and information to their customers about their surplus management.
Finansinspektionen is monitoring the developments following the EU referendum in the UK. We are continuing to maintain a dialogue with the Ministry of Finance, the Riksbank and the Swedish National Debt Office and keep close contact with the Swedish banks. FI always has contingency plans in place to take measures that will contribute to financial stability.
The objective of Finansinspektionen's supervision of insurance undertakings is to monitor their ability to fulfil their commitments to customers, and to monitor that customers receive comprehensible and accurate information. This report focuses on the first of the above-mentioned primary objectives.
The European Insurance and Occupational Pensions Authority, EIOPA, has conducted EU-wide stress tests to assess the resilience of European insurance undertakings to adverse market developments. In the Swedish part of the exercise, ten large insurance groups and insurance companies, who account for more than half of the Swedish insurance market, participated.
Swedish banks are relatively strong, but they continue to be vulnerable to disruptions on the financial markets, and the development within the Euro zone continues to represent a risk to the Swedish financial system.
Many of the development trends in today’s financial markets raise important issues for FI. For consumers, greater mobility and increasingly complex financial products represent not only more opportunities but also higher risks. FI needs to bring attention to these risks and resolve them.
Finansinspektionen finds that guidelines from the European supervisory authorities addressed to competent authorities or financial market participants are equivalent to Swedish general guidelines.
Finansinspektionen’s (FI’s) 2012 risk report 2012 continues to focus on unease on financial markets, where the greatest risk to the Swedish financial system is still a deepened sovereign debt crisis in Europe. Because of low market rates, life insurance undertakings are under pressure, and FI now sees a risk of consumers ending up in a squeeze as the firms review their commitments. This year too, FI views the financial advice market with concern. In this market, consumers are being invited to invest in complex products while advisors receive commissions.
The issues presented in this year’s Supervision Report stem from the work on financial consumer protection, financial stability and the requirements on company owners and management. In addition, the report discusses the increased international work, primarily within the EU.
Sweden has remained relatively stable in a turbulent period but during this time the risk level in the Swedish financial system has also risen. The uncertainty in surrounding markets has meant that banks’ liquidity risks and the impact of low interest rates on life insurance undertakings remain in focus. Finansinspektionen also believes there is a risk that the sale of complex products to consumers will increase.
Finansinspektionen's annual Supervision Report discusses areas in which fundamental issues with regard to supervision and regulatory development have risen to the forefront and in turn have resulted in new lessons and conclusions.
Finansinspektionen believes the risk level in the Swedish financial sector is lower than last year. Both Sweden’s economy and the situation on the financial market have improved. However, the uncertainty present in foreign markets represents a potential threat to Sweden’s development.
FI's annual Supervision Report describes the lessons learned from the financial crisis as well as more general issues regarding consumer protection.
Finansinspektionen is charged with ensuring that the financial system isstable and efficient and that consumer protection is adequate. We carry outthese assignments by conducting supervision of financial companies, whichincludes business intelligence, the granting of licences, preparation of egulations,operational supervision with controls of how companies act andpotential interventions.
The insurance barometer, at a total level, summarises the outcome of the insurance companies’ reporting to Finansinspektionen using the traffic light model and solvency for the last five six-month periods.
We can conclude that several insurance companies (life insurance companies and occupational pension funds) have deficits in their technical provisions and that the primary reason is an underestimation of the policyholders’ life expectancy rates.
The occupational pension funds* predominantly have no large holdings or concentrations of complicated financial instruments.
Our investigation of some 20 insurance companies shows that the companies are managing their register of assets covering technical provisions in a satisfactory manner.