Seesam Life Insurance announced on Oct. 25 that it is ready to assume management of all 10,000 life insurance policies issued by Polaris Life Insurance, declared bankrupt on Oct. 22. Its life insurance policies are worth 35 million kroons ($2.43 million).
Seesam Life Insurance, a subsidiary of the Finnish insurance company Pohjola, presently owns 5.4 percent of the Estonian life insurance market while Polaris Life has a 10.2 percent share.
Seesam’s management believes that most of Polaris Life’s clients are willing to come over to Seesam Life, because otherwise, they may lose their funds in Polaris Life.
“Registration of Polaris Life policies starts at the beginning of December and should be finished by the end of next year,” said Taivo Saar, chairman of Seesam Life Insurance.
According to its product and risk manager, Erki Kilu, Seesam Life has set three main conditions which the clients of Polaris Life should accept. First, all clients will receive a 3.5 percent interest instead of the 7 percent promised by Polaris Life.
“Taking into account the present economic situation, it was a big and unrealistic promise,” said Kilu.
The second condition is that Seesam Life will not pay out the reserves of Polaris Life policies during the next five years. The third condition says that in case of accidents and death, the client’s reserves will be paid out fully.
“We are taking over the obligations of Polaris Life and receive no real assets with them,” said Kilu. Polaris Life has a total of 37 million kroons in obligations and 4.5 million to 5 million kroons in assets.
According to the Baltic News Service, the company’s owner Andrus Bergmann took out more than 34 million kroons from Polaris Life and 25 million kroons from Polaris Insurance during its half-year trouble period.
The insurance contracts of Polaris Insurance have been already taken over by the biggest insurance company in Estonia, Sampo Insurance. Together with Sampo, which started life assurance business recently, there are nine life insurance companies in Estonia. The biggest life insurance company is Hansapank, which gives more than half of the turnover of the life assurance market. Seesam Life is the biggest pension insurance supplier.
Seesam Life Insurance belongs to the Pohjola Group (70 percent) and Seesam International Insurance Group (30 percent), and all Seesam’s contracts are re-insured by one of the world’s largest life insurance companies, Swiss-Re, as a guarantee of solvency.
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