Seesam takes over Polaris Life clients

  • 1999-11-04
  • By Kairi Kurm
TALLINN - 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

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

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.