SWITZERLAND Law and Practice Contributed by: Peter Ch Hsu, Daniel Flühmann and Tiffany Ender, Bär & Karrer
Organisational Requirements The organisational requirements include the following: • in principle, legal form as a company limited by shares ( Aktiengesellschaft ) or a co-operative ( Genossenschaft ) (Article 7 ISA); • good standing and assurance of proper business conduct by the persons responsible for direction, supervision, control and management of the insur- ance undertaking (Article 14 ISA; Article 12 et seq ISO); • organisational precautions to avoid conflicts of interest (Article 14a ISA; Article 14b et seq ISO); • organisational structure allowing the recognition, limitation and monitoring of all significant risks (Article 22 ISA; Articles 96 to 98a ISO; FINMA-Cir- cular 2017/2 Corporate Governance – Insurers); • appointment of a responsible actuary who has access to all business records (Article 23 ISA); • effective internal control system and internal audit function that is independent from management (Article 27 ISA); and • appointment of a licensed audit firm to review the conduct of business (Article 28 ISA). Financial Requirements The financial requirements include the following: • minimum capital between CHF3 million and CHF20 million (Article 8 ISA; Article 6 et seq ISO); • sufficient solvency margin (Swiss Solvency Test (SST); Article 9 et seq ISA and Article 21 et seq ISO; Article 1 et seq ISO-FINMA); • maintenance of an organisational fund ( Organisa - tionsfonds ) (Article 10 ISA; Article 11 ISO); • sufficient insurance-related reserves ( versicherung - stechnische Rückstellungen ) for all business activi- ties (Article 16 ISA; Article 54 et seq ISO; Article 28 et seq ISO-FINMA); • claims based on insurance contracts to be covered at all times by tied assets ( gebundenes Vermögen Article 17 et seq ISA; Article 58 et seq ISO-FINMA); and • maintenance of sufficient liquidity in order to be able to satisfy all of its payment obligations, even in stress scenarios (Article 22 ISA; Article 98a ISO; FINMA-Circular 2025/3 Liquidity – Insurers, in force since 1 January 2025).
Other Requirements Building on the basic regulatory requirements, cer- tain additional requirements or reliefs apply depending on the specifics of the case or the business. These include: • additional provisions (eg, regarding the scope of admissible activities or the preventive control of insurance tariffs), which apply to specific classes and types of insurance only (Article 31 et seq ISA; Article 120 et seq ISO); • additional requirements that apply to foreign insur- ance undertakings (Article 15 ISA; see 3.1 Over- seas-Based Insurers or Reinsurers ); and • the exemption of companies engaging in reinsur- ance business only from certain regulatory require- ments under the ISA, inter alia, from the require- ment to maintain tied assets. Special provisions apply to the consolidated supervi- sion of insurance groups and insurance conglomer- ates (Articles 64 et seq and 72 et seq ISA; FINMA-Cir- cular 2016/4 Insurance Groups and Conglomerates). FINMA may impose consolidated supervision on an insurance group or insurance conglomerate under certain conditions (Articles 65 and 73 ISA). Consoli- dated group supervision applies in addition to FIN- MA’s individual supervision over the Swiss insurance undertakings (or other regulated Swiss entities; Arti- cles 66 and 74 ISA). 2.3 Taxation of Premium Insurance premium payments are subject to stamp taxes if: • the policy is part of a Swiss portfolio of an insur- ance undertaking subject to Swiss insurance supervision or of a Swiss insurance undertaking enjoying public law status; or • a Swiss policyholder concluded the policy with a foreign insurance undertaking not subject to Swiss insurance supervision (Article 21 Federal Stamp Tax Act (STA)). Several types of insurance are exempt from this tax, including, in particular, premiums on reinsurance policies (Article 22 STA). In principle, the stamp tax amounts to 5% of the cash premium, with the excep-
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