By exercising the right of moving pension savings, consumers can benefit in a better overview of their pension savings activities. Unfortunately, movement of pension savings are currently often subject to high fees and taxation which makes it less attractive. To change this, the Swedish Ministry of Finance has presented a series of law amending propositions to improve for consumers to exercise their rights to move pension savings. The purpose of the amendments is to clarify and further extend the tax laws connected to movement of pension savings between different actors and simultaneously addressing the, often unmotivated, high fees charge by insurers when moving pension savings.

The propositions include

• An increased and clarified possibility to move together different pension insurances
• A clarification of what types of fees the insurance companies are allowed to charge for the movement of pension savings, i.e., fees that can be directly related to the administration of the movement
• The possibility to move the full value of one or more pension insurances to another pension insurance (with the same insured person) without any resulting tax consequences
• The right as a consumer to get a quick handling of a request to move pension savings to another insurance company.

Apart from an improved consumer landscape, we further see that this will impact the daily operations of insurance companies. It will be easier and more beneficial for consumers to move their pension savings more frequently than before, which will have an increasing impact on the insurance companies' lapse risk $$-$$ i.e., the risk of changes in the level or volatility of the rates of policy lapses, terminations, renewals and surrenders causing changes in the value of insurance liabilities. If the propositions are passed, it may force insurers to look over their calculation of the capital requirement of lapse risk, as a part of their Solvency Capital Requirement (SCR) calculation. Furthermore, insurers should already take in consideration the scenario that the propositions will be passed and include such outcome in their own risk and solvency assessment (ORSA).

## Reference

Swedish Ministry of Finance