Norwegian insurance can be undertaken only by joint-stock companies of mutual assistance associations. Foreign life insurance companies have practically ceased to operate in Norway. Life insurance policies and those for pension schemes are exempt from income tax and cannot be written by firms doing other insurance work.
The crown in 1767 initiated compulsory fire insurance in towns, and this fund still exists. Workers' compensation, third-party auto liability, pharmaceutical product liability, and aircraft liability are all compulsory insurances as well.
For marine insurance, stock companies now are more important than mutual associations. While a number of foreign insurance underwriters transact business in Norway, there is considerable direct insurance of Norwegian vessels abroad, especially in London. Most other insurance, such as automobile and burglary, is underwritten by Norwegian concerns. The insurance regulatory authority is the Banking, Insurance, and Securities Commission (BISC). The insurance sector is highly regulated, deeply influenced by the failure of a nonlife insurance company, Dovre, which spurred the Insurance Activities Act of 1988, which became effective in April 1989. The Insurance Activities Act of 1988 allows the BISC to control premium rates, monitor the financial position of insurance companies, and the risks that the insurance company writes. The BISC has wide powers of intervention. Companies may engage in insurance business after special permission has been granted and a license is obtained from the government. Recent liberalization throughout Europe promises to change radically the structure of the Norwegian insurance industry as foreign firms tap into the market. Direct insurance premiums written in 2001 totaled
US $8.008 billion; US $4.098 billion of the total was nonlife insurance premiums, and US $3.91 billion was life insurance.