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IMF Country Report No. 14/350

DENMARK

FINANCIAL SECTOR ASSESSMENT PROGRAM

DETAILED ASSESSMENT OF OBSERVANCE OF THE INSURANCE CORE PRINCIPLES

December 2014

This Detailed Assessment of Observance of the Insurance Core Principles on Denmark was prepared by a staff team of the International Monetary Fund. It is based on the information available at the time it was completed on December 2014.

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©2014 International Monetary Fund

Front Matter Page

DENMARK

FINANCIAL SECTOR ASSESSMENT PROGRAM INSURANCE CORE PRINCIPLES

DETAILED ASSESSMENT OF OBSERVANCE

December 2014

Prepared By

Monetary and Capital Markets Department

This Detailed Assessment Report was prepared in the context of an IMF Financial Sector Assessment Program (FSAP) mission in Denmark during March 2014, led by James Morsink, IMF and overseen by the Monetary and Capital Markets Department, IMF. Further information on the FSAP program can be found at http://www.imf.org/external/np/fsap/fssa.aspx

Contents

  • GLOSSARY

  • EXECUTIVE SUMMARY

  • ASSESSMENT OF INSURANCE CORE PRINCIPLES

  • A. Introduction and Scope

  • B. Information and Methodology Used for Assessment

  • C. Overview—Institutional and Macroprudential Setting

  • D. Preconditions for Effective Insurance Supervision

  • E. Recommendations and Authorities’ Response

  • F. Authorities’ Responses to the Assessment

  • DETAILED ASSESSMENT

  • TABLES

  • 1. Insurance Penetration and Density in 2012

  • 2. Size of the Insurance Sector in 2012

  • 3. Trends in Insurance Market Structure (number of companies)

  • 4. Trend in Technical Provisions

  • 5. Composition of Assets

  • 6. Gross Premiums Written by Major Lines of Business

  • 7. Profitability Indicators

  • 8. Solvency Ratios (Solvency I) by Major Lines of Business

  • 9. Summary of Compliance with the ICPs

  • 10. Summary of Observance Level

  • 11. Recommendations to Improve Observance of the ICPs

  • 12. Detailed Assessment of Observance of the ICPs

Glossary

ALM

Asset Liability Management

AML

Anti-Money Laundering

ASB

Accounting Standards Board

BoD

Board of Directors

BoM

Board of Management

CAFI

Consumer Affairs and Financial Intermediaries Division

CEO

Chief Executive Officer

CFO

Chief Financial Officer

CFT

Combating the Financing of Terrorism

CAB

Commercial Appeals Board

CoB

Conduct-of-Business

DBA

Danish Business Authority

DIA

Danish Insurance Association

DFSA

Finanstilsynet—Danish Financial Supervisory Authority

DIMA

Danish Insurance Mediation Act

DN

Danmarks Nationalbank

DKK

Danish Krone

DSA

Danish Society of Actuaries

EBA

European Banking Authority

EO

Executive Order

EEA

European Economic Area

EIOPA

European Insurance and Occupational Pensions Authority

EFRAG

European Financial Reporting Advisory Group

ESRB

European Systemic Risk Board

ESMA

European Securities and Markets Authority

ERM

Enterprise Risk Management

EU

European Union

FIU

Financial Intelligence Unit

FBA

Financial Business Act

FTE

Full Time Equivalent

GDP

Gross Domestic Product

IAIS

International Association of Insurance Supervisors

IASB

International Accounting Standards Board

ICPs

Insurance Core Principles

IFAC

International Federation of Accountants

IFRS

International Financial Reporting Standards

IMF

International Monetary Fund

ISA

International Standard on Auditing

ISN

Individual Solvency Need

KPI

Key Performance Indicator

MoF

Minister of Finance

MCR

Minimum Capital Requirement

MoBG

Ministry of Business and Growth

MoU

Memorandum of Understanding

MMoU

Multilateral Memorandum of Understanding

NAO

National Audit Office

ORSA

Own Risk and Solvency Assessment

PCR

Prescribed Capital Requirement

OECD

Organisation for Economic Co-operation and Development

ORSA

Own Risk and Solvency Assessment

SIFI

Systemically Important Financial Institution

SRC

Systemic Risk Council

SRO

Self-regulatory Organization

VaR

Value at Risk

Denmark: Detailed Assessment of Observance of the Insurance Core Principles
Author: International Monetary Fund. Monetary and Capital Markets Department