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2025-01-01 | FIN-FSA Regulations and guidelines 3/2025

Keva Governance Rules and Guidelines: Summary and Feedback on Statements

Finanssivalvonta (the Finnish Financial Supervisory Authority) issues amended rules and guidelines concerning Keva's governance, incorporating stakeholder feedback on board qualifications, investment expertise assessment, managing director selection, and cybersecurity reporting obligations. The authority clarifies that Keva's public-law nature and buffer fund require tailored supervision distinct from standard life insurance solvency frameworks, while maintaining collective assessment of board investment expertise and retaining flexibility for onboarding education. Furthermore, Finanssivalvonta adjusts terminology in the reporting forms and recommendations to align with Keva's statutory framework and accounting practices without imposing unnecessary constraints.

Finland

Finnish Financial Supervisory Authority

Memorandum 1 (of 5) 22.4.2025 FIVA/2024/1584 UNRESTRICTED (SP/FIVA) Public

Rules and Guidelines concerning Keva: Summary and Feedback on Statements

The statements were submitted by Keva and KT (Municipal and Welfare Sector Employers, hereinafter KT). The Ministry of Social Affairs and Health, Työeläkevakuuttajat TELA ry (Finnish Life Insurance Companies), and the Ministry of Finance stated that they had no comments. Finanssivalvonta (the Finnish Financial Supervisory Authority) thanks the submitters for their expert remarks.

1 General Comments

Reference	Comments with justifications (and possible wording proposal)	Response by Finanssivalvonta
General remarks	According to Keva, the rules and guidelines generally take due account of Keva's special legislation and bill preparations. However, Keva emphasizes that several established concepts in life insurance company regulation (such as sound and prudent business principles and good management) may not necessarily carry the same meaning in Keva's operations. Keva is a public-law pension institution and does not conduct insurance business. KT generally emphasizes that Keva's buffer fund differs in nature from the solvency framework of life insurance companies, and this must be considered in supervision.	Finanssivalvonta takes Keva's operational nature into account when interpreting the regulation. Furthermore, Finanssivalvonta notes in its supervision that Keva is not subject to the same solvency regulations as life insurance companies.

Memorandum 2 (of 5) 22.4.2025 FIVA/2024/1584 UNRESTRICTED (SP/FIVA) Public

2 Rules and Guidelines 3/2025 Keva Governance

Reference	Comments with justifications (and possible wording proposal)	Response by Finanssivalvonta
Chapter 4.1, Board of Directors	KT considers it highly important that the necessary education for the appointed person can be completed during board service.	Finanssivalvonta states that, based on the Act concerning Keva, a person appointed to the board must meet the qualification and other eligibility requirements throughout their term of office. For clarity, an interpretation on this matter is provided in Chapter 5.1, point 3. Naturally, completing additional education exceeding statutory requirements is also possible during board service.
Chapter 4.1, point 3	KT considers it positive that the requirement for good expertise in life insurance business is also deemed met by comprehensive onboarding education.	Finanssivalvonta retains the option to meet the requirement through education as well.
Chapter 4.1, point 5	Keva states that the Act concerning Keva or its bill preparations do not support Finanssivalvonta's interpretation that at least one-third of the board members must have good investment expertise. KT states that it remains unclear what is meant by "good investment expertise" and considers the matter to be assessed broadly enough, taking into account various educational backgrounds and knowledge. According to KT, the proposed wording carries the risk that personnel selection will be significantly delayed compared to current practice. The guidelines somewhat mix the assessment of individuals and the entire board. It would be appropriate to assess the position of the entire board. KT proposes adding the word "collectively" (kokonaisuutena) to point (1): The board must also collectively possess good investment expertise. However, fulfilling this collective requirement practically implies that the board contains a sufficient number of individual members with investment expertise.	Finanssivalvonta considers it justified that the board has a sufficient number of members familiar with investment operations. The Act or rules and guidelines do not require all these members to have identical investment expertise, but rather that investment expertise is assessed collectively. Finanssivalvonta considers that investment expertise can be accumulated through various educational and experiential backgrounds. Chapter 4.1, point 1 quotes Section 9(3) of the Act concerning Keva, which is why Finanssivalvonta does not amend the wording. Based on its phrasing, the requirement for investment expertise clearly applies to the board collectively. Finanssivalvonta also follows this in supervising the requirement.
Chapter 4.2, Managing Director	KT has no comments regarding point 4.2 for the managing director. However, KT emphasizes that the selection of the managing director should place greater emphasis on substantive expertise and that potential political connections should not be a selection criterion.	Finanssivalvonta assesses in its supervisory role that the person appointed as managing director meets the statutory requirements.
Chapter 4.2, point 10	Keva states that in the recommendation concerning the content of the managing director's onboarding program, it would be necessary to also refer to good administration practiced within the authority when referring to management.	The term "management" (liikkeenjohto) is used in Section 14(2) of the Act concerning Keva. According to the bill preparations (HE 55/2024 p. 22), however, the requirement for knowledge of management does not specifically refer to knowledge of corporate or business administration. Finanssivalvonta considers that the content of management knowledge, as well as other qualification requirements, and thus also the onboarding needs are assessed taking into account Keva's operational nature and content without separate mention. Accordingly, the managing director must be able to properly fulfill the requirements of good administrative practice in their role. These are described, for example, in Chapter 6, point 6 of the rules and guidelines.
Chapter 5.1, point 5	Keva states that the recommendation concerning the verification of a person's eligibility refers to Keva and that the recommendation should refer to the election committee's role as assessor of eligibility conditions.	According to Section 8c(1) of the Act concerning Keva, the election committee prepares a proposal for the representatives regarding remuneration for elected officials and the appointment of the board. Finanssivalvonta considers that preparing the proposal includes as one part the assessment and consideration of eligibility requirements. However, the relevant recommendation in the rules and guidelines refers generally to Keva, because Finanssivalvonta does not consider it necessary to restrict Keva's ability to organize its practical operations in this respect as best suits Keva within the statutory framework.
Chapter 5.1, point 6	Keva states that it remains unclear what is meant by professional competence and eligibility when selecting committee members, as the Act does not stipulate requirements.	The tasks of the committees are stipulated in the Act concerning Keva. According to point 6's recommendation, when selecting committee members, it should be ensured that they have sufficient professional competence and eligibility relative to the committee's tasks. Finanssivalvonta means by this recommendation that members of each committee should be selected from available persons such that the committee is able to perform its duties properly.
Chapter 5.4, point 14	Keva proposes that for the board, the notification concerning personnel selection could alternatively be made within one week after the election committee decides on the proposal to the representatives.	Finanssivalvonta states that, to perform its supervisory duties, it needs the notification as described in point 14 at latest two weeks before the person begins their role.
Chapter 5.4, point 15	Keva proposes that when selecting board members, the notification submitted to Finanssivalvonta would be signed by both the managing director and the chairman of the election committee, because the committee plays a central role in assessing eligibility requirements.	Finanssivalvonta amends the point to Keva's proposed wording. From Finanssivalvonta's perspective, there is no need for two signatories, but nor is there any obstacle to it.
Chapter 6, point 7	According to Keva, the point should refer not only to the board's rules of procedure but also to the administrative regulations (hallintosääntö), because Keva's administrative regulations have traditionally contained provisions corresponding to the rules of procedure.	The Act concerning Keva does not use the term "hallintosääntö" (administrative regulations). For this reason, the term is also not used in the rules and guidelines. The concept "työjärjestys" (rules of procedure) is an established term in corresponding contexts, and it is also used in the Act concerning Keva in connection with provisions regarding committees. The rules and guidelines do not prevent Keva from continuing to use the name "hallintosääntö" for the document insofar as it contains content intended as rules of procedure.
Chapter 7.1, point 6	Keva does not consider it justified to use the term "parent company of a group" (konsernin emoyritys) in the rules and guidelines.	Finanssivalvonta states that the term is not used in the draft under consideration.
Chapter 11.1, points 3–5	Regarding the reporting of operational disruptions and errors, Keva draws attention to the fact that the implementation of the Cybersecurity Directive brings reporting and other obligations.	Finanssivalvonta is aware of the regulation and its application to Keva. Regarding the proposed regulation, independent public-law institutions, such as Keva, will not fall under Finanssivalvonta's supervision. Therefore, Finanssivalvonta considers it necessary to include the relevant recommendations in the rules and guidelines to perform its own supervisory duties.

Memorandum 5 (of 5) 22.4.2025 FIVA/2024/1584 UNRESTRICTED (SP/FIVA) Public

3 Rules and Guidelines 1/2011 Submission of machine-readable supervisory data by entities operating on the insurance market to Finanssivalvonta

Reference	Comments with justifications (and possible wording proposal)	Response by Finanssivalvonta
VB032h	On form VB032h (Keva's balance sheet supplementary information), the term "remaining acquisition cost" is used, which does not correspond to Keva's accounting practice. Taking Keva's accounting practice into account, the more accurate term would be "acquisition value".	Finanssivalvonta amends the relevant point on the form.