Norway's DNB insurance arm needs to set aside NOK 13.3 bln

OSLO, March 28 Fri Mar 28, 2014 4:09am EDT

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OSLO, March 28 (Reuters) - Norwegian bank DNB's insurance arm will have to strengthen its reserves by 13.3 billion crowns ($2.2 billion) because of increased life expectancy, in line with its previous guidance, the bank said on Friday.

It added that it had already set aside 5.5 billion crown as of Dec 31 and the government's new proposal would mean that surplus return in one contract cannot be used to strengthen reserves on other contracts, indicating an opposition to the so-called 'solidarity principle'.

"With respect to provisions for higher life expectancy, DNB Livsforsikring has applied for a 15-year escalation period if the solidarity principle was not approved," it said.

"A 15-year escalation period is expected to result in a shareholder contribution of approximately 20 percent, which is roughly the same as if a 5-year escalation period and the solidarity principle had been applied," it added. (Reporting by Balazs Koranyi)

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