SWITZERLAND Law and Practice Contributed by: Peter Ch Hsu, Daniel Flühmann and Tiffany Ender, Bär & Karrer
Insurance Treaty is essentially the same as in the EU Direct Insurance Treaty. The UK Direct Insurance Trea- ty entered into force on 1 January 2021. On 21 December 2023, the finance ministers of Swit- zerland and the UK signed the Berne Financial Ser- vices Agreement on the mutual recognition of the equivalence of their regulatory and supervisory frame- works in selected areas of the financial sector to open cross-border market access for financial services. In particular, UK insurance undertakings (including UK branches of Swiss-authorised insurance undertak- ings) will be permitted to provide certain non-life insur- ance services directly to clients meeting the threshold criteria set out in the Berne Treaty without needing authorisation in Switzerland. Additionally, UK insur- ance intermediaries will no longer be subject to the localisation requirement under the revised ISA when providing certain cross-border services to said clients. The Agreement entered into force on 1 January 2026. 3.2 Fronting In principle, fronting is permitted in Switzerland. Swiss law does not provide for a specific retention obligation on the part of the cedent in fronting arrangements. 4. Transaction Activity 4.1 M&A Activities Relating to Insurance Companies In recent years, transaction activity in Switzerland has been noticeably high. Several insurance groups have restructured, consolidated and realigned their group operations. Further, several private equity investors have been active buyers of insurance and reinsurance undertakings, including, in particular, businesses in run-off (and such buyers have become increasingly accepted by FINMA as qualified or controlling inves- tors in insurance undertakings). Moreover, several transactions and co-operations in the insurtech space have been closed. Further, an innovative reinsurance solution to hedge interest rate commitments has been applied in a large-volume transaction as a novelty in the Swiss market. Under the agreement, the rein- surance undertaking has taken over the market and insurance risks of a legacy portfolio of individual life insurance products, within the framework of a quota
share reinsurance on a funds withheld structure. In addition, a certain consolidation in the Swiss insur- ance brokerage industry can be observed. 5. Distribution 5.1 Distribution of Insurance and Reinsurance Products General In Switzerland, insurance and reinsurance products may be distributed directly (ie, by the insurance and reinsurance undertakings themselves) or through insurance intermediaries. Insurance intermediaries in the meaning of the law are persons who offer or con- clude insurance contracts in the interest of insurance undertakings or other persons (Article 40 paragraph 1 ISA). Insurance intermediaries are also persons who have a commercial interest in offering or concluding an insurance contract via a website or another elec- tronic medium and who (i) provide information on the basis of individualised criteria about one or more insurance contracts that a policyholder can choose via this website or other electronic medium or (ii) cre- ate a ranking list of insurance products, including a price and product comparison (Article 182a ISO). The law distinguishes between so-called tied and untied insurance intermediaries (regarding the distinction between brokers and agents see 6.3 Intermediary Involvement in an Insurance Contract ). Registration Untied insurance intermediaries are insurance inter- mediaries that are in a fiduciary relationship with the policyholders and act in their interest (Article 40 para- graph 2 ISA). They are under an obligation to register in the public register of insurance intermediaries main- tained by FINMA. All other insurance intermediaries are considered tied insurance intermediaries (Article 40 paragraph 3 ISA). According to the revised ISA, tied insurance intermediaries are no longer able to regis- ter, unless the exception applies that a registration is required for activities abroad (Article 41 and 42 ISA). For intermediaries to be eligible for registration in the FINMA register, certain requirements must be fulfilled, including having their registered office, place of resi- dence or a branch in Switzerland, enjoying a good
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