According to the 2007 Article IV consultation report by the International Monetary Fund (IMF), the Norwegian financial sector -- including the banking, securities, and insurance sectors -- is healthy and well supervised, a statement also present in the 2005 IMF Financial System Stability Assessment (FSSA) report. The 2005 FSSA report also finds financial sector supervision to be effective and closely aligned with European Union (EU) regulations. The Financial Supervisory Authority of Norway (FSAN) is responsible for insurance supervision, and shares the responsibility of financial stability with the Norges Bank and the Ministry of Finance. The 2005 FSSA states that, as a member of the European Economic Area, Norway is required to implement EU Directives and is therefore continuously upgrading financial sector regulation and supervision. Further, the insurance and pensions sectors are profitable, but they remain vulnerable to market fluctuations. The 2005 FSSA makes certain recommendations concerning the FSAN's supervisory authority, the supervisory process, suitability of persons, investments, consumer protection and anti-money laundering. It also recommends continuous and diligent oversight of the risk management challenges faced by the insurance and pensions sector. The IMF's 2005 FSSA notes that these recommendations will improve Norway's compliance with international best practice. However, there is no detailed assessment publicly available as to Norway's compliance with individual Insurance Core Principles (ICPs) promulgated by the International Association of Insurance Supervisors (IAIS).

General Overview

According to the 2007 Article IV Consultation report by the International Monetary Fund (IMF), the Norwegian financial sector -- including the banking, securities, and insurance sectors -- is "sound and is well supervised" (p. 16). This statement is also presented in the 2005 IMF Financial System Stability Assessment (FSSA) report. The 2005 FSSA finds financial sector supervision to be "active, effective, and closely in line with EU [European Union] norms" (p. 1). With regard to insurance sector supervision, the IMF made certain recommendations concerning the Financial Supervisory Authority of Norway's (Kredittilsynet, or FSAN) supervisory authority, the supervisory process, the suitability of persons, investments, consumer protection and anti-money laundering. The IMF also recommended continuous and diligent oversight of the risk management challenges faced by the insurance and pensions sector. These recommendations, per the 2005 FSSA, "provide a framework for greater transparency and autonomy in the budgetary and supervisory processes and improve compliance with international best practice" (p. 31).

The 2005 FSSA attests that, as a member of the European Economic Area (EEA), Norway is required to implement EU Directives and is therefore continuously upgrading financial sector regulation and supervision. Further, the insurance and pensions sectors are profitable, although they remain vulnerable to market fluctuations. According to the 2005 FSSA, as of 2005, the non-life insurance sector has proved more profitable than the life insurance sector or pension funds. This is mainly due to the challenges posed to the latter two by the provision in many products of guaranteed returns to policyholders in an environment of asset-liability mismatch due to lower than expected returns on investments; the paucity of local investment opportunities; a prudential cap on foreign exposure; and interest rate and other market risks. In view of this scenario, the FSSA advises Norway to strengthen supervision to ensure sound risk management by life insurance firms and welcomes the anticipated pension system reform.

The FSAN is responsible for insurance supervision, and shares the responsibility of financial stability with the Norges Bank (NB) and the Ministry of Finance (Finansdepartementet, or MoF). The FSAN website indicates that the functions of the FSAN are regulated by the 1998 Act on Financing Activity and Financial Institutions (Financial Institutions Act). The FSAN's 2007 report titled "Strategy 2006-2010" proclaims that the FSAN is "the first integrated supervisor in the western world with responsibility for banking, insurance and the securities market alike..." (p. 5). Also, responsibility for financial stability is distributed in a clear cut framework between the FSAN, the NB, and the political and parliamentary authorities. The 2006 FSAN annual report states that the FSAN is responsible for the supervision of, inter alia, insurance companies, insurance intermediaries, and pension funds. The supervision of insurance intermediaries and insurance agents came under the lawful scope of the FSAN in January 2006, at which time the FSAN framed new rules for the insurance industry. Per the FSAN brochure titled "Supervision of the financial market," the FSAN was established in 1986 with the merger of the Bank Inspectorate and the Insurance Council. Section 3 of the Act on the Supervision of Credit Institutions, Insurance Companies, and Securities Trading, etc. (Financial Supervision Act) provides that the FSAN "shall ensure that the institutions it supervises operate in an appropriate and proper manner in accordance with law and provisions issued pursuant to law and with the intentions underlying the establishment of the institution, its purpose and articles of association" (p. 2). As the 2006 FSAN annual report notes, the FSAN has taken many steps toward conforming to the Solvency II framework when it becomes operational. It reorganized its Department of Finance and Insurance Supervision in 2006 to facilitate the changes in supervisory rules and methods required by the risk based supervisory regime under Solvency II. Further, the FSAN also cooperates with the NB and Statistics Norway (Statistisk Sentralbyrå, or SSB) to maintain and update the data reporting systems for credit institutions and insurance companies.

The Financial Action Task Force's (FATF) 2005 detailed assessment of Norway's compliance with AML/CFT recommendations notes that the Norwegian Financial Services Association (FNH) was formed by the merger of the Norwegian Bankers' Association and the Norwegian Insurance Association in 2000 and represents commercial banks, financial services companies as well as insurance companies. The FNH, according to the report, "is responsible for safeguarding the interests of its members towards the government, other organisations and the mass media" (p. 25).

The 2007 IMF publication titled "Financial Integration in the Nordic-Baltic Region: Challenges for Financial Policies" indicates that non-bank sectors in Norway, including insurance, are developed and have shown strong growth in recent years. Further, Norway has seen cross-sector conglomerations - facilitated by opportune legislative reforms in which large financial institutions "acquired large market shares in various financial services and now offer a one-stop shop for banking, life and nonlife insurance, asset management, and capital market activities" (pp. 16-17). However, insurance and pension products and asset management activities account for a small percentage of the operating income of these conglomerates. Their reach is even lower in the non-life market. Conglomeration has inspired a centralization of key management functions spanning sectors, and the EU has responded with the Financial Conglomerates Directive 2002/87/EC. This directive creates a single coordinating supervisor charged with the responsibility of adopting an integrated (non-sectoral) approach to the supervision of conglomerates. The report, however, notes that the individual entities within a financial conglomerate are still subject to sector rules, such as the EU Banking Directives and EU Insurance Directives.

Norway is listed as a member on the International Association of Insurance Supervisors (IAIS) website. The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) website informs that Norway, as a member of the EEA, participates in CEIOPS' activities and working groups as an observer. CEIOPS was formed by the 2003 European Commission (EC) Decision 2004/6/EC. It advises the EC in drafting directives, regulations and supervisory standards pertaining to the insurance and pensions sectors in order to facilitate effective implementation of guidelines and cooperation between national supervisors.

The FSAN's 2006 annual report notes that the FSAN's supervisory strategy comprises implementing international supervisory standards and methodologies. In pursuance of this, the FSAN must substantially reform its supervisory mechanisms to align itself with the requirements of Solvency II - the new solvency framework for the insurance sector within the EU/EEA to apply as from 2010. The 2007 FSAN publication titled "The Financial Market in Norway 2006: Risk Outlook" further states that new liquidity rules for financial institutions including insurance companies were promulgated under the Financial Institutions Act in 2006, and the FSAN submitted draft regulations on prudent liquidity management to the MoF in November 2006.

As the 2006 annual report of the FSAN notes, there were 107 insurance mediators as of 2006, an increase of almost double from 2005, when there were 56 entities. This sharp increase can be attributed to the Act on Insurance Mediation, which came into force in 2006 and broadened the scope of the FSAN's supervision over insurance entities. The 2007 FSAN publication titled "The Financial Market in Norway 2006: Risk Outlook" states that the life insurance companies showed improved results in 2006 as a result of strong equities and aggrandizement of their capital buffers. This situation promises to improve their outlook and long term return on assets under management. Life insurers' aggregate buffer capital saw an increase of NOK 10.3 billion over the end of 2005 to end at NOK 53.4 billion at the end-2006. The 2006 FSAN annual report advises life insurance companies to use the profitable year as an opportunity to enhance their capital buffer. However, the non-life sector, per the report "The Financial Market in Norway 2006: Risk Outlook," experienced tougher competition as reflected in lower premium earnings and overall profits. Nevertheless, their market risk exposure remains moderate, and continued profits since 2004 have strengthened their financial positions. The report goes on to add that both the life and non-life insurance sectors are highly concentrated, with the top three and four in the respective sectors claiming three-fourths and more of the market share in terms of gross premium earnings. Foreign competition has also increased in the non-life sector, with their market share growing to 40 percent of gross premium earnings.

The Principles

ICP 1 Conditions for effective insurance supervision

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The FSAN website indicates that the functions of the FSAN as the insurance sector supervisor, among other things, are regulated by the 1998 Act on Financing Activity and Financial Institutions. The 2005 IMF FSSA attests that, as a member of the EEA, Norway is required to implement EU directives and is therefore continuously upgrading financial sector regulation and supervision. The 2006 FSAN annual report states that the FSAN is responsible for the supervision of, inter alia, insurance companies, insurance intermediaries and pension funds. The supervision of insurance intermediaries and insurance agents came under the scope of the FSAN by law on January 1, 2006. The FSAN then framed new rules for the insurance industry. Per the FSAN brochure titled "Supervision of the financial market", the FSAN was established in 1986 with the merger of the Bank Inspectorate and the Insurance Council. Section 3 of the Act on the Supervision of Credit Institutions, Insurance Companies and Securities Trading, etc.. Section 3 of the Act states that the FSAN "shall ensure that the institutions it supervises operate in an appropriate and proper manner in accordance with law and provisions issued pursuant to law and with the intentions underlying the establishment of the institution, its purpose and articles of association." As the 2006 FSAN annual report notes, the FSAN has taken many steps toward conforming to the EU's new solvency regime for insurance companies, Solvency II. The 2007 FSAN report titled "The Financial Market in Norway 2006: Risk Outlook" brings to the attention that the 2005 Act on Insurance Mediation effectively limits the commitment of life insurers for guaranteed returns to policy holders to one year. Further, there will be some inconsistencies between the 2005 Act and Solvency II, which entails the valuation of insurance liabilities on a market basis. Thus, Norway must resolve to maintain compliance with Solvency II. Nevertheless, the above mentioned sources provide little information on Norway's compliance with ICP 1 Conditions for effective insurance supervision.

ICP 2 Supervisory objectives

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Section 3 of the Act on the Supervision of Credit Institutions, Insurance Companies and Securities Trading etc. requires that FSAN "ensure that the institutions it supervises operate in an appropriate and proper manner in accordance with law and provisions issued pursuant to law and with the intentions underlying the establishment of the institution, its purpose and articles of association" (p. 2). The 2006 FSAN annual report states a commitment to ensure "satisfactory financial strength, risk awareness, management, and control of institutions and to promote financial stability and well functioning markets" (p. 40). In order to do this, the FSAN conducts on- and off-site supervision, macroeconomic surveillance, licensing, analysis, and the drafting of new regulations. However, the above information is not sufficient to gauge Norway's compliance with ICP 2 Supervisory objectives.

ICP 3 Supervisory authority

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The IMF's 2005 Report on the Observance of Standards and Codes (ROSC) on Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) attests that the FSAN "is an independent government agency, responsible for supervising the Norwegian financial sector" (p. 5), which includes the insurance industry. Further, the report continues, the FSAN "has adequate powers to supervise and inspect the policies, practices and internal controls of Reporting Financial Institutions" (IMF 2005c, p. 5). As part of its supervisory powers, the FSAN can impose administrative sanctions for non-compliance.

The 2005 IMF FSSA states that, as a public sector agency, the FSAN is mandated by the Norwegian Constitution to be accountable to the MoF. This confers on the MoF the final de jure decision making authority. However it has not evidently impaired the FSAN's operational autonomy. The IMF FSSA nevertheless recommends that the supervisory autonomy and budgetary transparency of the FSAN be increased to improve compliance with international standards. The IMF also recommends that Norway formulate more explicit criteria for the composition of the FSAN Board of Directors to ensure more balanced administrative, industry and consumer representation and, thus, enhance the autonomy of its decision-making. The 2007 IMF Article IV report also calls for greater FSAN operational independence, but acknowledges that this may not occur. The Norwegian authorities state that the FSAN is an administrative agency within the MoF, which in turn is accountable to the legislature for the actions and decisions of the FSAN under Norway's parliamentary system, thereby necessitating ministerial oversight. However, the FSAN, in its 2007 report titled "Strategy 2006-2010" declares its intent to raise the issue of greater delegation of licensing authority from the MoF to itself, with a view to save time and resources. The aforementioned facts do not account for Norway's compliance with ICP 3 Supervisory authority.

ICP 4 Supervisory process

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The 2005 IMF FSSA finds that the MoF takes final supervisory decisions on the basis of political considerations and this could lead to a lack of transparency in the decision making process. The IMF recommends that Norway "codify the relevant decision-making criteria, and delegate all decision making rights to [the] FSAN" (p. 32). However, there is insufficient information publicly available as to Norway's compliance with ICP 4 Supervisory process.

ICP 5 Supervisory cooperation and information sharing

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The 2005 IMF ROSC on AML/CFT notes that Norway cooperates with foreign supervisory authorities through memoranda of understanding (MoUs) as well as international and EU-level agreements in the insurance sector. The 2005 IMF FSSA observes that "coordination between the Norwegian financial stability authorities and their Nordic counterparts has been exemplary to date" (p. 5). However, the IMF recommends considering formalizing somewhat further the coordination between the three institutions involved in financial stability: the NB, the FSAN, and the MoF. The 2006 NB annual report also mentions that the three agencies formally cooperate on issues of financial stability and crisis management through bi-annual tripartite meetings introduced in 2006. The FSAN's 2007 brochure titled "Supervision of the financial market," proclaims that the FSAN makes extensive use of both domestic and international information exchange, communication, and cooperation. Domestic agencies involved in this activity include the MoF, other supervisors, supervised institutions, trade unions, media, research and educational institutions, as well as consumers. International supervisors, particularly those of the EU/EEA areas, also participate. The broad goals of national and international cooperation are to exchange supervisory experience and harmonize rules, so as "to ensure that competitive conditions for Norwegian enterprises are broadly in line with those enjoyed by enterprises elsewhere in the EEA" (p. 9). The 2006 FSAN annual report mentions that the FSAN cooperates with the NB and the SSB to maintain and update the data reporting systems for credit institutions and insurance companies. The report also states that "participating in international cooperation and in cross-border coordination of supervisory methods and standards remains important. The FSAN, per the 2006 annual report, is a member of the IAIS and participates in the standard setting process for insurance sector supervision. Under the aegis of CEIOPS and the EC, FSAN has also participated in negotiating an agreement between the EU and U.S. insurance supervisors for information exchange and supervisory cooperation. Despite these positive developments, there is still no clear statement specifying Norway's compliance with this principle, as revised by the IAIS in October 2003.

ICP 6 Licensing

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The 2005 IMF ROSC on AML/CFT finds that the FSAN authorizes insurance brokers and shares its licensing authority with the MoF, which licenses insurance companies. The 2005 IMF FSSA recommends that Norway expand the licensing authority delegated to the FSAN by the MoF. The FSAN, in its 2007 report titled "Strategy 2006-2010" declares its intent to raise the issue of greater delegation of licensing authority from the MoF to itself, with a view to save time and resources. There is, however, little further information as to Norway's compliance with ICP 5 Supervisory cooperation and information sharing.

ICP 7 Suitability of persons

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The 2005 IMF FSSA finds that, as of 2005, there are no obligations on the insurers to notify the FSAN "if a notifiable person such as an owner or senior manager ceases to fulfill "fit and proper" requirements" (p. 32), and therefore recommends that Norway "implement appropriate "whistleblowing" regulations for insurers" (p. 32). There is little further information as to Norway's compliance with ICP 7 Suitability of persons.

ICP 8 Changes in control and portfolio transfers

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According to the 2004 "Global Survey" by the Institute of International Bankers (IIB), the Norwegian MoF promulgated changes to the "rules on restrictions on holdings in banks and insurance companies to a system based on the European Economic Area (EEA) banking and insurance directives" (p. 102). The new rules, per the IIB report, take into consideration "the suitability of acquirers of qualifying holdings" (p. 102) including their "supervisory aspects, the institution's independence in relation to individual shareholders, other commercial activity and competitive considerations" (p. 102) rather than the previous system of a 10 percent limit on holdings in banks and insurance companies. According to the 2005 FATF assessment of Norway's compliance with international AML/CFT standards, the Act on Financing Activity and Financial Institutions decrees that all proposals to acquire or dispose of ownership in insurance companies beyond a certain threshold need MoF approval, which can deny it if the applicant does not fulfill fit and proper requirements. Further, the MoF approval is also required if an acquisition makes an insurance company a wholly owned subsidiary. There is little further information publicly available regarding Norway's compliance with ICP 8 Changes in control and portfolio transfers.

ICP 9 Corporate governance

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The 2005 IMF FSSA commends Norway on its sound corporate governance regime, and further notes that "corporate governance...arrangements appear well developed and generally adequate to minimize risks to the financial sector from a lack of financial integrity" (p. 19). The primary laws and secondary regulations, as well as the Corporate Governance Code adopted by the Oslo Stock Exchange in 2004, form Norway's corporate governance legal framework. Compliance by financial services companies is enforced through "numerous checks; supervision by on-site inspection, external audit, internal audit, and for insurance companies, a control committee" (p. 19). However, this information is not sufficient to assign a level of compliance for Norway's compliance with ICP 9 Corporate governance.

ICP 10 Internal control

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The IMF's 2005 ROSC on AML/CFT attests that the FSAN "has adequate powers to supervise and inspect the policies, practices and internal controls of Reporting Financial Institutions" (p. 5), including insurance companies. The 2005 detailed assessment of Norway's AML/CFT compliance by the FATF also finds that all life and non-life insurance companies are required to have either an internal or independent audit function to evaluate compliance with internal controls. There is little further information publicly available regarding Norway's compliance with this principle, as revised by the IAIS in October 2003.

ICP 11 Market analysis

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According to the 2004 annual report of the FSAN, the FSAN conducts regular analyses of insurance firms' profitability, solvency, and risk, as well as "ad hoc analyses of topics of current interest" (p. 33), and publishes them on its website. There is little further information publicly available regarding Norway's compliance with ICP 11 Market analysis.

ICP 12 Reporting to supervisors and off-site monitoring

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According to the 2005 IMF FSSA, "accounting, auditing, and actuarial standards and professions are well developed, in conformity with international standards and best practices" (p. 19). The FSSA further notes that the FSAN licenses and supervises accountants and auditors in Norway. Per the 2007 FSAN publication titled "The Financial Market in Norway 2006: Risk Outlook," all Norwegian firms are "obliged or entitled to prepare consolidated accounts under IFRS" (p. 53) since 2005, and as of February 2007 "no such right is available to financial institutions or investment firms" (p. 53). However, the MoF is considering bringing accounting regulations for banks, finance companies, mortgage companies, and investment firms in Norway into line with International Financial Reporting Standards (IFRS). The report notes that the alignment of accounting standards with IFRS has begun with the introduction of a complete accounting standard for insurance contracts. Unfortunately, there is little information publicly available specifically addressing Norway's compliance with ICP 12.

ICP 13 On-site inspection

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As the 2005 IMF FSSA observes, supervision of legal and regulatory compliance by Norway's insurance entities "comprises on-site supervision, off-site supervision and macroeconomic surveillance" (p. 32). The 2004 annual report of the FSAN adds that on-site inspections aim to monitor and ensure satisfactory solvency, controls, and risk management systems in supervised insurance entities. There is little further information publicly available regarding Norway's compliance with this principle, as revised by the IAIS in October 2003.

ICP 14 Preventive and corrective measures

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There is insufficient information publicly available regarding Norway's compliance with ICP 14 Preventive and corrective measures.

ICP 15 Enforcement or sanctions

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The 2005 IMF ROSC on AML/CFT finds that the FSAN has the authority to "impose a broad range of administrative sanctions for non-compliance" (p. 5) with prudential regulations, including letters requesting corrective action, orders through [and] fines or de-licensing" (p. 5). The ROSC, however, finds that the FSAN's powers to apply sanctions on non-compliant officers and employees of institutions are unclear. There is little further information publicly available directly addressing Norway's compliance with ICP 15 Enforcement or sanctions.

ICP 16 Winding-up & exit from the market

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There is insufficient information publicly available as to Norway's compliance with ICP 16 Winding-up & exit from the market.

ICP 17 Group-wide supervision

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There is insufficient information publicly available on which to base the assessment of Norway's compliance with ICP 17 Group-wide supervision.

ICP 18 Risk assessment and management

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Per the 2007 FSAN publication titled "The Financial Market in Norway 2006: Risk Outlook," both the FSAN and life insurers conduct the latter's risk assessment through stress tests to evaluate their ability to withstand market shocks. Further, assessments by forecasting institutes in 2006 concluded that "life insurers' risk-bearing capacity needed to be strengthened in order to improve prospects of higher return and assure good long-term return on assets under management" (p. 58). The 2005 IMF FSSA advises careful and continuing oversight of the risk management challenges to the insurance and pensions sector. The IMF welcomed the (then) anticipated pension system reform and observed that "recent or pending legislation...allow more options for risk-sharing between insurers and policyholders and allow for a reduction in the market risk taken by the insurance companies; and require more transparency in premium-setting, including as to the premium related to the guaranteed return" (p. 20). However, there is insufficient information publicly available on which to base Norway's compliance with ICP 18.

ICP 19 Insurance activity

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There is insufficient information publicly available as to Norway's compliance with ICP 19 Insurance activity.

ICP 20 Liabilities

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There is insufficient information publicly available regarding Norway's compliance with this principle, as revised by the IAIS in October 2003.

ICP 21 Investments

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The 2005 IMF FSSA notes the paucity of domestic investment opportunities for insurers and an inadequate prudential cap on foreign exposures, albeit higher than that on banks. The IMF states that "currency and duration mismatches arise because of the shortage of local investment opportunities to closely match the long-term pension obligations. Currency mismatches are limited by regulation, although this regulation is the most generous permissible under EU Directive" (p. 32). The same report adds that the exposure limits allowed to insurers are greater than those allowed to banks, increasing vulnerability to systemic contagion. The IMF recommends adopting a range of alternative measures dealing with the situation, including "a capital element specifically measured to cover known mismatches; greater use of products such as DC [defined contribution] pensions where risk is borne by the consumer, and if this recommendation became common market practice, the Conduct of Business Principles could be strengthened in advance" (p. 32). However, neither the IMF FSSA nor any other publicly available source provides further information regarding Norway's compliance with this principle, as revised by the IAIS in October 2003.

ICP 22 Derivatives and similar commitments

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There is insufficient information publicly available with respect to Norway's compliance with this principle, as revised by the IAIS in October 2003.

ICP 23 Capital adequacy and solvency

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The 2004 IIB report titled "Global Survey" states that the Solvency I Directives for life and non-life insurance companies came into effect January 1, 2004. Per the FSAN report "The Financial Market in Norway 2006: Risk Outlook," the capital requirements regulations and the capital adequacy rules applying to insurance companies contain transitional provisions allowing them, group wide, to "opt to compute capital charges under the rules that applied up to and including 2006" (p. 50) until the end of 2007. The EC is also modernizing its solvency framework for European insurance companies which will be compatible with the latest IFRS. This new framework, Solvency II, is expected to come into force in 2010. Norway, as a member of the EEA, is required to implement Solvency II framework. The IIB report, however, notes that the changes in Norwegian regulations and the impact on Norwegian insurance companies as a result of adopting Solvency II are still unclear. Apart from these facts, there is little further information publicly available regarding Norway's compliance with this principle, as revised by the IAIS in October 2003.

ICP 24 Intermediaries

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Per the 2004 FSAN annual report, internal control regulations do not cover insurance brokerages, although the FSAN recommends them to adhere to the principles of those regulations. Inspections of insurance brokerages by the FSAN highlighted "deficient routines in general and...the absence of routines for reconciling trade debtors and commission receivables in particular" as well as "poor follow-up of audit reports" (p. 34). There is little further information publicly available regarding Norway's compliance with ICP 24 Intermediaries.

ICP 25 Consumer protection

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The 2005 IMF FSSA finds that the Norwegian Bureau for Insurance Disputes (NBID), which is concerned with insurer/insured relationships, does not handle disputes between intermediaries and clients. However, the IMF report notes that Norway has drafted a regulation to remedy this, and counsels Norway to consider consumers' risks when finalizing the draft. The IMF also recommends implementing the EU intermediary directive and the consumer protection regulation involving disputes between intermediaries and clients. Besides this information, there is little further information publicly available regarding Norway's compliance with ICP 25 Consumer protection.

ICP 26 Information, disclosure & transparency towards the market

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There is insufficient information publicly available regarding Norway's compliance with ICP 26 Information, disclosure & transparency towards the market.

ICP 27 Fraud

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There is insufficient information publicly available regarding Norway's compliance with ICP 27 Fraud.

ICP 28 Anti-money laundering/ Combating the Financing of Terrorism

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Per the 2005 IMF ROSC on AML/CFT, the Norwegian Penal Code criminalizes both money laundering and terrorist financing. The 2003 Money Laundering Act further strengthened the AML/CFT regulatory framework. The Money Laundering Team, housed in the National Authority for Investigation and Prosecution of Economic and Environmental Crime (ØKOKRIM) is Norway's financial intelligence unit (FIU). The 2006 FSAN annual report states that the FSAN supervises financial institutions' (including life and non-life insurance companies) compliance with the Norwegian Money Laundering Act of 2003, and prioritizes supervision in line with the FATF recommendations. The FSAN report titled "Strategy 2006-2010" attests that the FSAN AML/CFT supervisory rules are in line with EU requirements as well as international best practices. In general, customer requirements are implemented in Norway, but the full range of FATF customer due diligence (CDD) requirements is not. The 2005 IMF ROSC on AML/CFT adds that there is no concept of enhanced CDD measures for high risk customers. The 2005 FATF report adds that institutions are exempted from identifying customers for low value insurance contracts. The 2005 U.S. Department of State report on Norway observes that all financial institutions, including insurance companies, are required to report large and suspicious transactions to the ØKOKRIM, verify customer identity, and maintain transaction records for a minimum of five years. Further, large cash transactions and cross border transactions are to be reported to the NB. The 2005 IMF ROSC on AML/CFT further states that the legal duty of confidentiality does not prohibit disclosure by financial institutions if specifically prescribed by law, and thereby enables the exercise of the investigative and supervisory powers of the ØKOKRIM. In addition, insurance companies, banks, and other finance companies can exchange customer information during suspicious transaction investigations. Further, as the 2005 FATF report notes, the FSAN distributed Circular 9/2004 pertaining to AML/CFT guidelines for financial institutions in 2004 to all financial institutions and other entities, including insurance companies and brokers. Norway is also part of several international AML/CFT agreements and EU-level working groups in the insurance sector. However, the above information is not sufficient to assess Norway's compliance with this principle, as revised by the IAIS in October 2003.