Order on the Registration of Assets in Life Insurance Companies, Cross-Border Pension Funds, and Company Pension Funds

Order on the Registration of Assets in Life Insurance Companies, Cross-Border Pension Funds, and Company Pension Funds 1)

Pursuant to Section 193, subsection 13, Section 219, subsection 6, and Section 316, subsection 1, of Act No. 718 of 13 June 2023 on Insurance Undertakings, as amended by Act No. 481 of 22 May 2024, Section 49, subsection 5, and Section 117, subsection 9, of the Act on Company Pension Funds, pursuant to Consolidation Act No. 183 of 26 February 2024, it is hereby prescribed:

Scope of Application

Section 1. This Order applies to life insurance companies and cross-border pension funds conducting life insurance business covered by Annex 2 to the Act on Insurance Undertakings, and to company pension funds, subject to subsection 2.

Subsection 2. The Order does not apply to reinsurance business.

Content and Structure of the Register

Section 2. Life insurance companies, cross-border pension funds, and company pension funds shall register assets in accordance with Section 219 of the Act on Insurance Undertakings and Section 49 of the Act on Company Pension Funds, respectively.

Section 3. With a view to ensuring that the value of the registered assets corresponds at least to the value of the total insurance or pension provisions, pursuant to Section 219, subsection 1, first sentence, of the Act on Insurance Undertakings and Section 49, subsection 1, of the Act on Company Pension Funds, the value of the registered assets must correspond to the value of the insurance or pension provisions plus a margin of coverage.

Section 4. For life insurance companies and cross-border pension funds, assets shall be calculated according to the following rules:

1. Assets shall be calculated and adjusted continuously in accordance with the Order on Financial Reports for Insurance Companies and Cross-Border Pension Funds.
2. Deductions shall be made for any encumbered portion, and loans may only be included at a value resulting after deduction of liabilities to the respective borrower.
3. Financial contracts that reduce the risk that assets cannot cover insurance liabilities shall be included at the value of such contracts in the value of the assets.
4. Accrued but unpaid interest on assets shall be included in the value of the assets.

Subsection 2. For company pension funds, assets shall be calculated in accordance with Section 50 of the Act on Company Pension Funds.

Section 5. For life insurance companies and cross-border pension funds, insurance provisions shall be calculated according to the following rules:

1. Provisions shall be calculated and adjusted continuously in accordance with the Order on Valuation of Assets and Liabilities, including Insurance Provisions, for Group 1 Insurance Companies, etc.
2. Provisions shall be calculated gross for directly written insurance.
3. The portion of provisions for indirectly written insurance that is covered by reinsurance deposits with ceding insurance companies shall be deducted.
4. Up to half of accrued premium receivables shall be deducted.

Subsection 2. For company pension funds, pension provisions shall be calculated in accordance with Section 51 of the Act on Company Pension Funds.

Section 6. The register must at all times contain all assets covered by the registration and information regarding their value.

Subsection 2. Assets must be uniquely individualized:

1. Deposits in credit institutions shall be individualized by providing the name of the credit institution as well as the account and registration number.
2. Fund assets registered in a securities depository shall be individualized by providing the name of the institution holding the account and the depot account number for each individual fund asset.
3. Assets deposited in a credit institution shall be individualized by providing the name of the credit institution and the depot account number under which the asset is deposited.
4. Securities deposited in a collective depot shall be individualized by providing a specification of which securities belong to the life insurance company, the cross-border pension fund, the company pension fund, or the branch.
5. Deposits on joint accounts shall be individualized by providing the share belonging to the life insurance company, the cross-border pension fund, the company pension fund, or the branch.

Section 7. The register must be able to generate an overview of all registered assets within 24 hours. The overview must indicate the market value of the assets at the time of generation.

Guidelines and Procedures

Section 8. The board of directors of the life insurance company, cross-border pension fund, or company pension fund shall prepare guidelines for the structure of the register and for how the register is maintained.

Subsection 2. The guidelines must indicate at least:

1. Who is responsible for maintaining and controlling the register.
2. How fluctuations in the value of registered assets are taken into account, ensuring that the value of the registered assets corresponds at all times at least to the value of the insurance or pension provisions.
3. How accrued interest and proceeds from sales or withdrawals are handled, including whether interest and proceeds are included in the register.

Subsection 3. If the register consists of several subsystems, the guidelines must contain a description of the relationship between the subsystems and of how an overview of all registered assets is generated in accordance with Section 7.

Section 9. The board of directors of the life insurance company, cross-border pension fund, or company pension fund shall, in the guidelines pursuant to Section 8, make a reasoned estimate of which asset types should cover the insurance or pension provisions and the size of the margin of coverage, pursuant to Section 3.

Subsection 2. The board of directors of life insurance companies and cross-border pension funds that also conduct business covered by insurance classes 1 and 2 in Annex 1 to the Act on Insurance Undertakings shall, in addition, take expected fluctuations in insurance provisions into account when making the reasoned estimate.

Section 10. The management of the life insurance company, cross-border pension fund, or company pension fund shall prepare a procedure for the continuous monitoring and updating of the register.

Subsection 2. The procedure must indicate at least:

1. How registered assets are individualized.
2. How the value of assets stated in the register is calculated.
3. How an overview of the registered assets is generated.

Reporting

Section 11. Life insurance companies, cross-border pension funds, and company pension funds shall submit a statement of total insurance or pension provisions and registered assets to the Danish Financial Supervisory Authority no later than five weeks after the end of each quarter.

Subsection 2. A life insurance company or cross-border pension fund that conducts business covered by Annex 2 to the Act on Insurance Undertakings and also conducts business covered by insurance classes 1 and 2 in Annex 1 to the Act on Insurance Undertakings shall include the calculation of total insurance provisions and premiums written for this business in the statement pursuant to subsection 1.

Section 12. For the statement pursuant to Section 11, the Danish Financial Supervisory Authority's forms shall be used, and the statement shall be reported electronically to the Danish Financial Supervisory Authority.

Subsection 2. When completing the forms, insurance or pension provisions and registered assets shall be stated at their value at the end of the quarter.

Audit

Section 13. The external auditor shall conduct an unannounced audit at least once a year, verifying that the assets included in the register are present and have a value that corresponds at least to the value of the insurance or pension provisions.

Subsection 2. The Danish Financial Supervisory Authority may, in special cases, require that unannounced audits be conducted more frequently than the frequency mentioned in subsection 1.

Subsection 3. The external auditor shall report on the unannounced audit in the audit protocol relating to the annual accounts.

Subsection 4. If the unannounced audit gives rise to special remarks, the external auditor shall immediately notify the Danish Financial Supervisory Authority thereof.

Penal Provisions

Section 14. Violation of Section 3, Section 6, Sections 7-11, and Section 13, subsections 1, 3, and 4, is punishable by a fine.

Subsection 2. Companies, etc. (legal persons) may be subject to criminal liability in accordance with the rules in Chapter 5 of the Criminal Code.

Entry into Force

Section 15. This Order enters into force on 1 January 2025.

Subsection 2. Order No. 1260 of 29 November 2019 on the Registration of Assets in Life Insurance Companies, Cross-Border Pension Funds, and Company Pension Funds is repealed.

Danish Financial Supervisory Authority, 5 December 2024 Louise Mogensen / Line Bergmann

1. The Order contains provisions implementing parts of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), OJ EU 2009, L 335, p. 1, and parts of Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORPs) (recast), OJ EU 2016, L 254, p. 37.

Law Gazette A
2024 Published on 13 December 2024
5 December 2024. No. 1515.
Ministry of Industry, Business and Financial Affairs, Danish Financial Supervisory Authority, file no. 24-019418 CQ003065