Finanstilsynet has decided that new mortality tables are to be introduced for collective pension insurances written by life insurers and pension funds with effect from 2014 onwards.
"Increased life expectancy poses a challenge to life insurers and pension funds. Higher premiums and higher technical provisions will be needed to have sufficient funds to meet future obligations", says Finanstilsynet's Director General, Morten Baltzersen.
The new mortality tables will significantly raise the need for provisions, and Finanstilsynet presumes that most pension institutions will require a stepping-up period. The stepping-up plans will apply as from 2014, and should not extend beyond five years. Policyholder surplus will be available to cover the higher provisioning requirement. A minimum of 20 per cent of the increase of technical provisions should be met by the pension institutions.