Press release 1 January 2018

Insurance activities require authorisation – verify who you are dealing with

Many new companies providing risk management or risk-sharing services have entered the insurance sector or alongside it. In their marketing, service providers make extensive use of online services and social media, and marketing is active. 

Activities fulfilling the identifying characteristics of insurance activities require authorisation. In that case, they are also more closely regulated by the Insurance Companies Act. Some service providers have failed to observe this. The purpose of the need for authorisation and related supervision is to safeguard the interests of the insured.

“Insurance is a key element of both private individuals’ and companies’ risk management. When customers acquire risk-sharing services, it is important for them to be careful and to ascertain what kind of service provider and activities they are dealing with,” says Kaisa Forsström, Head of Insurance Supervision at the Financial Supervisory Authority (FIN-FSA). 

Need for authorisation supervised in the policyholder’s interest

The purpose of supervision is to ensure that insurance services providers have sufficient financial capacity to pay the promise compensation and benefits. Other requirements related to the pursuit of insurance activities, such as the service providers’ expertise and the continuity and accountability of their activities, are to safeguard the policyholder. Insurance companies’ procedures are also regulated; in their activities, they must, among other things, adhere to good insurance practice and to regulations governing the sale and marketing of insurance.

Legislation does not contain a precise definition of insurance or insurance activities. As criteria in assessing the need for authorisation, the FIN-FSA uses the general identifying characteristics of insurance activities, such as the possibility of loss or damage, namely risk, the arbitrariness of the insured loss or damage, the agreement between the parties as well as whether the insurance cover granted to the customer is subject to charge. With regard to supervision, it is material whether the services provided are considered to be insurance activities. 

What if authorisation is not obtained?

If the FIN-FSA in its supervisory role observes that a service provider is practising insurance activities without authorisation, it forwards the case to the Police for investigation in accordance with Chapter 29, Section 3 of the Insurance Companies Act. Last year, the FIN-FSA submitted one request for investigation to the Police regarding the possible authorised practice of insurance activities.

To request an interview with

  • Teija Korpiaho, Head of Division
  • Please contact FIN-FSA Communications, tel. +358 9 183 5030 (weekdays 9.00–16.00)