Norwegian Guarantee Scheme Files Lawsuit Against the Danish Guarantee Fund

The Norwegian Guarantee Scheme for Non-Life Insurance (Garantiordningen) initiated legal proceedings because it maintains that the Danish Guarantee Fund for Non-Life Insurers should cover compensation claims from Norwegian policyholders who had taken out industrial injury insurance in Norway with Alpha Insurance. The background to the dispute is the bankruptcy of the Danish insurance company Alpha Insurance in May 2018.

The Danish Guarantee Fund and the Norwegian Guarantee Scheme disagree on which authority should be responsible for covering the compensation claims relating to Norwegian industrial injury cases. The disagreement arises because, in Denmark, industrial injury claims in the event of an insurance company bankruptcy are covered by the Labour Market Insurance Authority (AES). In Norway, coverage of industrial injury claims for Norwegian policyholders in the event of an insurer’s insolvency falls under the Norwegian Guarantee Scheme.

“The Danish Guarantee Fund cannot cover the industrial injury insurance policies of Norwegian policyholders, as Denmark has a different system for handling such claims,” says Christian C. Lund Nielsen, Chairman of the Danish Guarantee Fund.

“From the Danish side, we have sought to avoid an escalation of the disagreement and therefore proposed a meeting between the two guarantee schemes. However, our Norwegian counterparts did not respond to our invitation and instead chose to initiate legal proceedings. We consider this a disproportionate reaction, but it does not change the fundamental position that the Danish Guarantee Fund does not cover industrial injury claims,” says Christian C. Lund Nielsen.

This position is supported by the Danish Guarantee Fund’s legal counsel, the Danish Government Legal Adviser (Kammeradvokaten).