Commission injunction and increased transparency: Following an amendment to the Danish Insurance Mediation Act in May 2006, a new commission injunction and disclosure obligations came into effect on July 1, 2007. Since Network Partner PFA Pension cooperates closely with the leading pension brokers in Denmark, the new rules will have a direct impact on many clients.
Increased transparency
From July 1, 2007, brokers are obliged to disclose information to clients regarding all costs incurred in connection with their services on an annual basis. This initiative will make clear exactly what costs are involved when using a broker as against having a pension scheme serviced directly by an insurer.

Commission injunction for pension schemes
The commission injunction on mediation of pension schemes established through employers affects new business where the total annual premium in the scheme amounts to DKK 4 million or more. If total annual premium amounts to DKK 2 million or more, the injunction will take effect from July 1, 2009.

Under the new rules, the insurance broker and the client must make a written agreement which states the size of the amount payable to the broker for establishing the insurance scheme and for any other services during the first year of the contract, including any current servicing. This means that the broker is no longer entitled to merely state that the commission amounts to a percentage of the premium.

The broker must disclose to the insurance company the agreed broker’s fee, divided between initial costs and subsequent costs, as well as the length of time during which the initial costs must be included in the insurance premium. This period may not exceed three years. This is a change from previous practice, when large upfront commissions would be recovered over time periods often exceeding 10 years.

Agreements between brokers and insurance companies established prior to January 1, 2006, are not subject to the commission injunction until July 1, 2011. However, if the agreement is changed or amended, the commission injunction will take immediate effect.

PFA’s leading role
PFA Pension was the first pension company to introduce increased transparency for clients through its annual survey, which shows all expenses related to their policies. In order to improve transparency in pension schemes even further, PFA’s customers received a brochure with the annual survey for 2006 that explains the connection between the year’s investment return and their deposit interest. You can read more about this initiative in PFA’s annual report 2006, available at – now available in English

June 2007 saw the launch of PFA Pension’s new website in English, in response to requests from customers and business partners for easy access to information about PFA in English.

The previous English website featured very limited information about PFA and did not enjoy the same focus and attention as the Danish website. However, in light of increasing globalisation, and the fact that a growing number of PFA’s customers are English-speaking or are Danish subsidiaries of international groups, PFA decided to launch an entirely new website in English.

The new English website includes facts about PFA Pension, as well as annual reports and information on PFA’s products and ownership structure. Since PFA Pension is customer-owned, there are no major shareholders with highly demanding expectations for their investments. Instead, PFA’s goal is to return the largest amount possible to all its customers.

Visit and select “English” in the top-right corner to learn more about what it means to be both a customer and an owner of PFA. You will also find more about PFA’s value creation model, PFA CustomerCapital, international pooling and PFA’s networks.