Summary of the supervisory steps taken by the Danish Financial Supervisory Authority towards Gefion Insurance A/S

The Danish Financial Supervisory Authority has not approved Gefion Insurance’s recovery plan and therefore ordered the company to stop writing business. The Danish Financial Supervisory Authority has also ordered the company to recognize impairment losses on receivables from three of the company’s agents.

Gefion Insurance offers insurances through agents in Europe. The company primarily offers insurances to individuals and small and medium sized companies and focuses on specialty lines in the different countries. The agents are responsible for the underwriting and the administration of policies and claims. In some cases the claims administration is handled by a claims handling company.

On November 28, 2019, the Danish Financial Supervisory Authority (DFSA) ordered Gefion Insurance to prepare a recovery plan as Gefion Insurance no longer fulfilled the solvency capital requirement. The recovery plan must lead to the solvency capital requirement being fulfilled within 6 months.

The DFSA has assessed that Gefion Insurance’s recovery plan could not be approved, since the recovery plan did not provide sufficient evidence that the company would be able to fulfill the solvency capital requirement within 6 months and hence be able to adequately protect the interests of current and future policyholders. Therefore, the DFSA also ordered the company to stop writing business until the DFSA can approve a recovery plan or the company complies with the solvency capital requirement.

Furthermore, the DFSA has ordered Gefion Insurance to recognize impairment losses on receivables from three of the company’s agents due to the agents’ financial situations. Regarding one of the receivables, Gefion Insurance can omit recognition of impairment losses if Gefion Insurance can document to the DFSA that the agent does not have significant financial difficulties. The DFSA has also ordered the company to ensure that it has a proper accounting practice and is able to document its activities.

The DFSA has informed the host national supervisory authorities via a European Insurance and Occupational Pensions Authority (EIOPA) Cross-Border Platform of Collaboration about the orders issued to Gefion Insurance.

The Danish Financial Supervisory Authority must point out that Gefion Insurance A/S has appealed the decision to stop writing business to the Danish Business Appeal Board (Erhvervsankenævnet). In this connection, the company has requested Erhvervsankenævnet to grant that the appeal is to have suspensory effect.

Questions and Answers – Gefion Insurance

Question

Answer

1. Who is Gefion Insurance and what has happened?

Gefion Insurance is an insurance company registered in Denmark and authorised to write business in Sweden, Belgium, Finland, France, Greece, Ireland, Italy, Norway, Romania and United Kingdom. Gefion Insurance was also authorised to write business in Germany until end of June 2019 and in Poland until 25 March 2020.

On 24 March 2020, the Danish Financial Supervisory Authority ordered Gefion Insurance to cease writing new business including the renewal of existing insurance policies.

Gefion Insurance continues to operate and therefore existing policies continue to remain in force.

2. Why has the Danish Financial Supervisory Authority ordered Gefion Insurance to cease writing new business including the renewals of existing insurance policies? The Danish Financial Supervisory Authority assesses that the financial position of Gefion Insurance entails a significant risk that the company will not be able to comply with its Solvency Capital Requirement going forward. This could be to the detriment of policyholders and beneficiaries. The Danish Financial Supervisory Authority continues to monitor the situation closely. The Danish Financial Supervisory Authority emphasizes that Gefion Insurance will continue to operate and therefore existing policies continue to remain in force.
3. Is my insurance policy valid? Gefion Insurance continues to operate and therefore existing policies continue to remain in force. Gefion Insurance A/S will continue to pay claims, which fall due under those existing policies.
Any existing Gefion Insurance policyholders who have concerns about their policy should contact the firm directly, or their broker (if the policy was bought through a broker).
4. I have an outstanding claim, what should I do? All claims should continue to be submitted to Gefion Insurance or its appointed claims handling agent in the normal way.
5. I have just received a renewal notice, can I renew this policy?

Gefion Insurance has in-formed the Danish Financial Supervisory Authority that renewal notices not yet accepted by policyholders will no longer be valid (to the extent that this is permissable under local regulations). If a renewal notice is valid then policyholders are encouraged to take Gefion Insurance’s situation into consideration before renewing their policy.

Any existing Gefion Insurance policyholders who have concerns about their policy in relation to a renewal notice should contact the firm direct-ly, or their broker (if the policy was bought through a broker).

6. My motor insurance will expire soon, will it be renewed automatically following national rules?

As of 24 March 2020 Gefion Insurance will no longer issue renewal notices. Gefion Insurance’s policyholders are therefore required to arrange the necessary motor insurance with another insurance company when their existing policy expires.

Any existing Gefion Insurance A/S policyholders who have concerns about their policy renewal should contact the firm directly, or their broker (if the policy was bought through a broker).

7. Will my claim still be paid out? Gefion Insurance continues to operate and therefore existing policies continue to remain in force. All claims should continue to be submitted to Gefion Insurance A/S or its appointed claims handling agent in the normal way.
8. How do I tell if I am insured by Gefion Insurance? Policyholders can check the name of the insurance firm on their policy documentation.
In addition, any existing Gefion Insurance policyholders who have concerns about their policy should contact the firm directly, or their broker (if the policy was bought through a broker).
9. Can I cancel my policy? That will depend on the terms and conditions of individual policies - policyholders should contact the firm directly, or their broker (if the policy was bought through a broker).
10. I need to make an adjustment to my policy (e.g. want to add driver, change my car), can I still do this? Any existing Gefion Insurance policyholders should contact the firm directly, or their bro-ker (if the policy was bought through a broker). Before making any adjustments to their existing policy, policy-holders are encouraged to take Gefion Insurance’s situation into consideration.
11. For policies that are paid via monthly instalments, for how long is my policy still in force (i.e. does the next instalment count as new business)?  

Monthly instalments do not constitute a monthly renewal. The duration period of the policy can be found in the policy documentation.

Any existing Gefion Insurance policyholders who have concerns about their policy should contact the firm directly, or their broker (if the policy was bought through a broker).