Denmark’s Financial Supervisory Authority (FSA) has ordered Industriens Pension and PensionDanmark to revise their money laundering risk assessments.

It follows a cross-sectoral study of life insurance and pension companies by the FSA, which began in the fourth quarter of 2023. The Danish Anti-Money Laundering Act covers life insurance and pension companies and each company must prepare a risk assessment that identifies and assesses the company's risk of being used for money laundering and terrorist financing.

As part of its study, the FSA asked eight companies to provide their risk assessments. Its analysis found that the quality and scope of risk assessments vary, but compared to a previous survey in 2020, companies are much more likely to reflect their business model and the risks to which they are exposed in their risk assessments.

However, some of the risk assessments, namely Industriens Pension and PensionDanmark, do not sufficiently meet the requirements of the law. The FSA found that Industriens Pension has, among other things, not sufficiently identified and assessed its risk factors in terms of customer types, countries and geographical areas in its assessment of the risk of being used for money laundering and terrorist financing.

Furthermore, it found that PensionsDanmark has not adequately identified its risks separately for anti-money laundering (AML) and terrorist financing (TF). The risk and indicators for AML/TF are very different, which the FSA said is important for companies to realise.

As a result, both companies have been ordered to revise their risk assessments to take these factors into account, support these with relevant data, and be based on national and supranational risk assessments.

As part its assessment, the FSA considered whether the risk assessments: identified the risk factors that as a minimum must be included in a risk assessment according to section 7(1) of the Danish Anti-Money Laundering Act; identified and assessed the inherent risk of being used for money laundering and terrorist financing; hedged its risk separately for money laundering and terrorist financing; substantiated the risk assessment with relevant information and based on the supranational and national risk assessment and other relevant documentation.

The other companies assessed included Nordea Pension, Lægernes Pension, P+ - Pensionskassen for Akademikere, Danish Pension Fund for Nurses and Medical Secretaries, Danish Health Professionals' Pension Fund and Pædagogernes Pension.

In general, the Danish FSA assesses that life insurance and pension companies in Denmark have a relatively low risk of being used for money laundering and terrorist financing.

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