Use the Lexology Navigator tool to compare the answers in this article with those from other jurisdictions. 

Ownership and organisational requirements

Ownership of (re)insurers

Are there any restrictions on ownership of or investment in (re)insurers in your jurisdiction, including any limits on foreign ownership/investment?

Yes. Insurers and reinsurers are subject to provisions on ownership control, which apply to all ‘financial enterprises’ as defined by the Financial Enterprises Act. The provisions on ownership control in the act implement Directive 2007/44/EC. Under the Financial Enterprises Act, acquisitions of so-called ‘qualified holdings in a financial enterprise’ are subject to pre-approval by the Ministry of Finance or the Norwegian Financial Supervisory Authority (NFSA). A ‘qualifying holding’ is a holding that represents 10% or more of the capital or voting rights in a financial enterprise, or that allows for the exercise of significant influence on the management of the enterprise and its business. The provisions apply to the acquisition of holdings in (re)insurers by both foreign and Norwegian entities and persons. Approval may be granted only if the acquirer is considered appropriate according to specific non-discriminatory criteria as further described in the Financial Enterprises Act (the so-called ‘fit and proper’ test). Further, requirements of new approvals are triggered when a holding reaches or exceeds certain thresholds (20%,30% and 50%). In practice, the Norwegian regulators have refused to approve ownership in excess of 20% to 25% by owners that are not regulated financial enterprises themselves. This is being challenged in a pending court case where the plaintiffs claim, among other things, that the Norwegian regulators breached Articles 31, 36 and 40 of the European Economic Area Agreement by not approving a sale.

Conditions may be set in relation to any approval needed from the NFSA to acquire a holding in a (re)insurer, including a deadline for carrying out the acquisition.

What regulations, procedures and eligibility criteria govern the transfer of control of/acquisition of a stake in a (re)insurer?

The procedure and eligibility criteria are set out in the Financial Enterprises Act and the Regulation on Financial Enterprises and Financial Groups. A detailed notification must be sent to the NFSA stating the size of the holding that the applicant shall transfer to or acquire in a (re)insurer, as well as the total holding in the (re)insurer following the transaction. The notification shall also include details that are of relevance to the calculation of the applicant's overall holding – for instance, any consolidation or agreements to exercise voting rights in the (re)insurer if the acquirer is a legal entity. The notification shall include information that is of significance to the assessment of whether approval to acquire the holding in question shall be granted. The NFSA holds a discretionary power to request any information that it finds necessary for that purpose. The NFSA has 60 working days from the date that it has confirmed receipt of the notification to grant or refuse approval.

The ‘fit and proper’ test is run on the basis of several criteria, including:

  • the need to ensure proper and adequate management of the (re)insurer;
  • the (re)insurer's activities and the level of influence that the acquirer will be able to exercise following the proposed transaction;
  • the acquirer's fitness and propriety as owner of its overall holding; and
  • whether the acquisition of the holding is adequate in relation to the (re)insurer's present and future activities.   

Organisational requirements

Must (re)insurers adopt a certain legal structure in order to operate? If no mandatory company organisation applies, what are the common structures used?

Under the Financial Enterprises Act, (re)insurers shall be organised either as public limited liability companies or mutual organisations. Some minor exceptions apply.

Do any particular corporate governance requirements apply to (re)insurers, including any eligibility criteria for directors and officers?

(Re)insurers established in Norway are subject to a number of corporate governance requirements under the Financial Enterprises Act and related regulations, including – but not limited to – requirements relating to the following:

  • The board's composition – the board must be made of at least five members and unless the entity is a subsidiary in a financial group, the chairman and at least two-thirds of the board members must be external – that is, they cannot be employed by the insurer or other companies in the same group. In addition, employees have a right to require representation in the board if certain thresholds are exceeded.
  • The creation of board subcommittees – (re)insurers that have issued securities listed on a regulated market (subject to certain exceptions) and those with assets exceeding Nkr10 billion must establish an audit committee. Further, (re)insurers that have over 50 employees and assets exceeding Nkr5 billion must establish a remuneration committee.
  • The issuance of various guidelines and policies – including a remuneration policy, guidelines on internal risk control/risk management, guidelines on asset management and risk classification of exposures, guidelines on professional secrecy, as well as a policy that shall ensure compliance with relevant information requirements and the design of insurance contracts.
  • Detailed instructions for the chief executive officer.

Operating requirements

Authorisation procedure

Which (re)insurers must obtain authorisation from the regulator before operating on the market and what is the procedure for doing so?

(Re)insurers that seek establishment in Norway must apply for a licence in accordance with the procedure described in Chapter 3 of the Financial Enterprises Act. The key steps are as follows:

  • An application to obtain a licence as a (re)insurer must be sent to the Norwegian Financial Supervisory Authority (NFSA). The application must include the articles of association and a business plan that shall describe the proposed operational activities for the next three years. The plan shall further include information on ownership structure, members of management, control systems, a description on how the entity will gain sufficient capital in order to comply with applicable capital requirements for (re)insurers, various budgets and the description of how the entity will comply with requirements regarding anti-money laundering and combating the financing of terrorism. Further, the application must include information on the suitability of each board member, chief executive officer (CEO) and other persons who will participate in the management of the entity.
  • The NFSA will consider whether the application might entail follow-up questions. The NFSA usually takes approximately six months from receipt of the application to making a decision as to whether to grant a licence. The NFSA may also set conditions for the licence, including that the business be operated in a particular manner or within certain limits, or other terms in accordance with the purposes of the Financial Enterprises Act.

Insurers established outside the European Union may not offer their services in Norway, unless invited to do so.

Insurers established in the European Union may passport their rights to offer insurance on a cross-border basis in Norway.

Reinsurers established in a non-EU country may provide reinsurance in Norway without any need to meet any licence and registration requirements in Norway. Reinsurers established in an EU-country need to have passported their rights to offer insurance on a cross-border basis in Norway.

Financial requirements

What are the minimum capital and solvency requirements for (re)insurers operating in your jurisdiction?

In general, (re)insurers are required to hold a solvency margin or buffer to cover the risk of their assets being insufficient to cover their liabilities. Under the Financial Enterprises Act, the main capital requirement is the solvency capital requirement (SCR). (Re)insurers are required to hold a lower minimum capital requirement (MCR). 

The SCR shall correspond to the value-at-risk of the basic own funds of an insurer or reinsurer subject to a confidence level of 99.5 % over a one-year period.

The MCR shall be calibrated to the value-at-risk of the basic own funds of an insurer or reinsurer subject to a confidence level of 85 % over a one-year period. The MCR shall not be less than 25% or more than 45% of the enterprise's SCR, including any supplemental capital requirements imposed by the NFSA under Sections 13 and 14 of the Financial Enterprises Act.

These requirements do not apply to (re)insurers established outside Norway.

Do any other financial requirements apply?

The NFSA may impose other capital requirements on (re)insurers established in Norway.

Personnel qualifications

Are personnel of (re)insurers subject to any professional qualification requirements?

The management of the (re)insurer (eg, CEO) or persons who hold key functions in the (re)insurer (eg, compliance officer and risk management officer) established in Norway are subject to professional qualification requirements under the Financial Enterprises Act – namely, they must:

  • have the necessary qualifications and professional experience to execute the post or office;
  • not have been convicted of a criminal offence where the offence gives reason to assume that he or she will not be able to carry out their duties in a proper manner; and
  • not have conducted other offices or post in a manner that gives reason to assume that he or she will not be able to carry out their duties in a proper manner.

Business plan

What rules and requirements govern the business plans of (re)insurers?

In general, (re)insurers established in Norway are required to adopt guidelines and policies regarding several business aspects, including guidelines for internal control and risk management. The business plan must comply with the regulatory framework under the Financial Enterprises Act and related regulations. However, no specific provisions exist as to the content of such business plans.

Risk management

What risk management systems and procedures must (re)insurers adopt?

The board of directors is required to adopt guidelines and procedures in order to identify, monitor and manage any risks that the (re)insurer is or may be exposed to. Further, the (re)insurer is required to establish independent control functions – namely, a compliance function, a risk management function and an actuarial function.

Reporting and disclosure

What ongoing regulatory reporting and disclosure requirements apply to (re)insurers?

(Re)insurers are subject to a number of regulatory and disclosure requirements, including:

  • reporting obligations to the NFSA relating to the capital requirements set out in the Solvency II Directive (2009/138/EC);
  • reporting certain key figures to the NFSA;
  • reporting the number of complaints received from customers; and
  • submitting their annual reports to the authority.

Other requirements

Do any other operating requirements apply in your jurisdiction?

 (Re)insurers are also subject to general Norwegian law applicable to Norwegian companies, including company law and legislation covering data protection, employment, health and safety, money laundering and terrorist financing, auditing and taxation.


What are the consequences of non-compliance with the operating requirements applicable to (re)insurers?

Non-compliance with operating requirements is punishable by corrective orders and fines. Theoretically, imprisonment of up to one year may also be imposed where the breaches are carried out wilfully or through negligence. The latter sanctions are however rarely seen.

If the breach is severe or a number of various breaches are deemed severe, the NFSA may withdraw the (re)insurer’s licence.

Click here to view full article.