21 November 2016

Expiry of agreement on insurance contracts providing for saving abroad

Redwing and Central Bank of Iceland

Act no. 105/2016 Amending the Foreign Exchange Act, no. 87/1992 (capital account liberalisation), which entered into force on 21 October 2016, eased restrictions on individuals’ investment abroad, among other provisions. Individuals are now permitted to exercise their investment authorisations by entering into agreements with foreign insurance companies concerning payment of premiums for the accumulation of third-pillar pension savings, supplemental insurance protection, and regular periodic savings.
In autumn 2014, the Central Bank of Iceland entered into an agreement with foreign insurance companies concerning insurance contracts entailing saving abroad; cf. Central Bank press release no. 32/2014. That agreement enabled the insurance companies in question to maintain their contractual relationships with customers in Iceland without having a detrimental impact on Iceland’s balance of payments. Another objective of the agreement was to promote equal treatment of parties operating within the same market. The agreement was to remain in effect for as long such contracts were restricted under the Foreign Exchange Act, no. 87/1992. These restrictions have now been eased; therefore, the agreement with the foreign insurance companies has expired. The Central Bank has authorised the foreign insurance companies to export the deposit balances they had accumulated with the Bank on the basis of the above-mentioned agreement, a total of EUR 13.5 million.

Further information can be obtained from Már Guðmundsson, Governor of the Central Bank of Iceland, at tel: +354 569-9600.


No. 29/2016
21 November 2016