Cabinet approved new rules on natural disaster insurance on Jan. 26, 2024 meeting.
A new scheme will be established whereby insurance companies must set aside natural disaster capital in a fund, for use in deficit years.
The natural damage insurance scheme in Norway is in many ways unique, scheme ensures safety for individual and crisis preparedness in the event of natural disasters.
In many countries, one risks standing on bare ground if houses and homes destroyed by natural disasters; this arrangement ensures this is not the case in Norway.
Those experiencing damage due to natural forces should receive insurance settlement.
Certain parts of the arrangement have nevertheless received criticism; in the past, the insurance premium over time has been seen as too high.
This has led to some insurance companies building up large natural damage capital.
Key Aspects
So NOR GVT decided to establish scheme whereby insurance company must set aside natural damage capital in a fund managed by the Norwegian Natural Damage Pool.
The arrangement means natural damage capital in pool must grow in years with surplus and companies must be able to draw on that capital in years with deficit.
A transitional arrangement will also be established; changes will help to ensure that natural damage capital, and return it generates, is used to cover natural damage.
The changes will also provide more equal conditions for competition between insurers.
In connection with legislative changes, new regulation on natural damage insurance adopted that provides more detailed rules on natural damage insurance scheme.
The regs partly lead to further applicable rules but were developed in many respects.
Effectiveness
The changes apply in particular to organization and tasks in the pool; both the legislative changes and the regulations come into force on Jan. 1, 2025.
Dec. 2024 Amending Regulation
On Dec. 13, 2024, NOR GVT published regulation FOR-2024-12-13-3091 amending Reg 111 of Jan. 26, 2024; entry into force immediately, effective as of Jan. 1, 2025.
Amended title is Regulations on natural disaster insurance (Natural Disaster Insurance Regulations); board members' agreements; damages compensation, settlement costs.
Regulators
NOR GVT
Entity Types
CNSM; Ins
Reference
FOR-2024-12-13-3091, OG 2024-1417, 12/13/2024; OG 2024-0078, Reg 111, PR, 1/26/2024; Natural Damage Insurance Act 70/1989; Citation: FOR-2024-12-13-3091;
