SWITZERLAND Law and Practice Contributed by: Peter Ch Hsu, Daniel Flühmann and Tiffany Ender, Bär & Karrer
• the Agreement of 25 January 2019 between the Swiss Confederation and the UK on Direct Insur- ance other than Life Insurance (UK Direct Insur- ance Treaty); and • the Agreement of 21 December 2023 between the Swiss Confederation and the United Kingdom on Mutual Recognition in Financial Services (Berne Financial Services Agreement or Berne Treaty). FINMA further specifies matters of insurance regu- lation in numerous circulars (not binding for Swiss courts; however, the courts in Switzerland often take the circulars into account when interpreting the laws and ordinances). In addition, FINMA publishes less formal guidance papers and FAQs on supervisory matters. Switzerland is a civil law country. However, precedent cases of Swiss courts still play an important role in interpreting and developing the statutory law (Article 1 paragraph 2 Swiss Civil Code). 2. Regulation of Insurance and Reinsurance 2.1 Insurance and Reinsurance Regulatory Bodies and Legislative Guidance General Swiss insurance supervisory law is codified in the ISA and its implementing ordinances (see 1.1 Sources of Insurance and Reinsurance Law ), with FINMA being the overall competent licensing and supervi- sory authority. In general, the ISA applies to (Article 2 paragraph 1 ISA): • Swiss-domiciled insurance and reinsurance undertakings (with respect to reinsurance, various regulatory reliefs apply (Article 35 ISA)); • foreign-domiciled insurance undertakings engag- ing in insurance business in or from Switzerland (subject to deviating provisions in an international treaty) (see 3.1 Overseas-Based Insurers or Rein- surers ); • insurance intermediaries (see 5. Distribution ); • insurance groups and insurance conglomerates (see 2.2 The Writing of Insurance and Reinsur- ance ); and
• Swiss-domiciled insurance special purpose com- panies. Exemptions Certain specific types of activities and undertakings are exempted from the scope of application of the ISA, namely (Article 2 paragraph 2 ISA): • insurance undertakings domiciled abroad that only engage in reinsurance activities in Switzerland (see 3.1 Overseas-Based Insurers or Reinsurers ); • public insurance undertakings and private insur- ance undertakings that are regulated by special federal legislation; • foreign government-owned or state-guaranteed export risk insurance undertakings (ECAs); • certain insurance intermediaries who are in a rela- tionship of dependence with a policyholder if they only pursue the interests of this policyholder and the companies controlled by this policyholder; • certain insurance co-operatives ( Versi - cherungsgenossenschaften ) that existed on 1 January 1993; • certain associations ( Vereine ), organisations ( Ver - bände ), co-operatives ( Genossenschaften) and foundations ( Stiftungen ) that conclude contracts with their members, members of co-operatives or beneficiaries on transactions of a collateral nature, in particular on sureties or guarantees; and • insurance intermediaries if their activities are limited to insurance contracts of minor importance and supplement a product or service (so-called “annex insurance”). Other regulatory bodies exist – eg, in the area of man- datory health insurance (the Federal Office of Public Health), pension schemes (the Federal Occupational Pension Supervisory Commission) or certain cantonal building insurances (supervisory authority of the rel- evant Swiss canton). 2.2 Writing of Insurance and Reinsurance Insurance and reinsurance undertakings that are with- in the scope of application of the ISA must obtain an insurance licence from FINMA before engaging in any regulated activities – ie, writing insurance and/or reinsurance business (Article 3 paragraph 1 ISA). The main licence requirements are set out below.
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