The capital market in the Faroes is currently distorted because there is no free market in the insurance industry.
The current overarching principle is that individuals residing in the Faroes cannot obtain insurance cover abroad, and that foreign insurance companies cannot enter the Faroes to offer their services.
The Faroese Insurance Market To Be Liberalized
The capital market in the Faroes is currently distorted because there is no free market in the insurance industry.
The current overarching principle is that individuals residing in the Faroes cannot obtain insurance cover abroad, and that foreign insurance companies cannot enter the Faroes to offer their services.
Nearly all pension savings in the Faroes are placed in foreign securities, partly because of the investment rules in current legislation. Accordingly, this source of investment funds is not available to the Faroese business community.
Concrete initiatives regarding the reorganization of the capital market include the following:
Insurance area:
• Insurance legislation is to be updated and coordinated with EU legislation.
• Foreign insurance companies will be given the opportunity to operate in the Faroes and offer their services to the Faroese, given that Faroese insurance companies are allowed the same equal access in the respective foreign markets.
• The Faroese will be allowed to take out insurance abroad.
• Pension funds will be allowed to invest in unregistered securities to a greater extent than is now the case.
Financial area:
• Legislation regarding Danish "Real Kreditt" mortgages shall be updated.