Finnish earnings-related pension provider, Elo, has simplified its management structure following supervision by the Finnish Financial Supervisory Authority (FIN-FSA).
In December 2020, FIN-FSA appointed a representative, Pekka Jaatinen, to supervise the activities of the pension insurance company. Regulatory powers allow FIN-FSA to appoint an agent to supervise the activities of an authorised supervised entity if there is evidence of incompetence or carelessness in the management of its affairs.
The intervention is, in part, because Elo’s solvency ratio fell below the permitted level for one day, which the it said was due to the fall in the stock markets as a result of the Covid-19 pandemic. Since then, Elo has undergone a change of its management structure, including the departure of Satu Huber, who was CEO at the time; Carl Pettersson has now taken over this role.
In June 2021, FIN-FSA asked Elo’s board of directors to submit a plan to clarify its corporate governance system, which was submitted in November. The plan details how the company’s management structure has been simplified and overlapping management teams have been abolished.
In addition, the plan ensures that the roles and responsibilities of the supervisory board, the board of directors and the executive management are clear, and that reporting is working well. The organisation of internal control will also be clarified, and the resourcing of control functions will be strengthened.
As a result, FIN-FSA has said the plan contains several significant changes in order to clarify and improve the administrative system. In its view, the measures contained in the reply clearly contribute to and ensure the adequacy and effectiveness of the management system.
“Our co-operation with the Ombudsman and the Financial Supervisory Authority continues in good spirit. In our opinion, agent supervision focuses on monitoring the internalisation and effectiveness of the measures now implemented and planned,” Pettersson said.
FIN-FSA will assess the continuation of prudential supervision in April 2022 at the latest.
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