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Survey of compliance with principle of equity by life insurance companies in 2018: principle of continuity required by principle of equity was generally fulfilled and companies complied with their agreed principles for distribution of bonuses


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According to a survey of compliance with the principle of equity published by the Financial Supervisory Authority (FIN-FSA), there are some large variations in life insurance companies’ principles for distribution of bonuses. Customer bonuses granted by companies for their savings and pension insurance policies have gradually decreased over the past ten years. Total returns on insurance policies, however, have exceeded, on average, both the change in consumer prices and market interest income.

The following findings were made in the survey

  • The principle of continuity required by the principle of equity was generally fulfilled and companies complied with their agreed principles for distribution of bonuses.
  • In accordance with the principle of equity, the companies had taken into account equity between the different insurance policies of their customers.
  • The information disclosed by companies on the principle of equity and compliance with it varied in quality, but was acceptable in the case of all the companies.
  • The information disclosed by companies on distribution of the surplus among shareholders and policyholders was however inadequate.

In recent years, many companies have distributed notably high dividends to their shareholders. Taking into account the decline and change to negative of interest rates since 2018, and the impact of this on companies’ solvency, conditions for profit distribution have generally deteriorated. Companies should take this into account in their 2019 financial statement planning, which the FIN-FSA also drew attention to in its supervisory release 10 December 2019 – 66/2019. If profit distributions of previous years prove to be excessive, the companies’ shareholders should also be prepared to capitalise the companies in order to safeguard the principle of continuity of bonuses.

The principle of equity refers to how companies distribute surpluses between customers, on one hand, and customers and company shareholders, on the other. The principle of equity also requires compliance with the principle of continuity: companies must undertake to maintain the level of bonuses for their customers. The definition of objectives for the principle of equity is based on provisions in the Insurance Companies Act.

The FIN-FSA collects insurance statistics on life insurance companies annually, and this information is used in the survey of compliance with the principle of equity. The survey compares the bonus distribution objectives disclosed by the companies on their websites as well as reports on the actual achievement of the said objectives.

The survey is in Finnish and contains a summary in Swedish.

For further information, please contact

Jari Niittuinperä, Chief Actuary, telephone +358 9 183 5517 or jari.niittuinpera(at)

Appendices (in Finnish)

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Regulator Information

Abbreviation: FIN-FSA
Jurisdiction: Finland

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