Faroes updates insurance law to align with Danish and EU rules

Kringvarp Føroya reports that the Faroese Insurance Supervisory Authority and the Ministry of Employment are updating the insurance law to bring it broadly into line with Denmark’s new insurance legislation.

The authorities are also assessing which European Union insurance provisions should be implemented in the Faroe Islands and which regulations need to be updated or rewritten.

Minister of Employment Jacob Vestergaard provided the information in a response to Member of the Faroese Parliament Helgi Abrahamsen, who asked about the mandatory pension savings scheme. He also asked whether life insurance companies and pension funds face requirements governing their investments.

Vestergaard said the insurance law requires money controlled by life insurance companies or pension funds to be invested in a suitable way that benefits customers. Investments must provide customers with the highest possible return in relation to the investment risk.

The Insurance Supervisory Authority is currently conducting an updated return assessment, which is expected to be completed later this year.

In Denmark, life insurance companies and pension funds have voluntarily developed a system that gives pension customers an overview of important information. Vestergaard said he would ask the Insurance Supervisory Authority to examine whether a similar system is needed in the Faroe Islands.