SWITZERLAND Law and Practice Contributed by: Peter Ch Hsu, Daniel Flühmann and Tiffany Ender, Bär & Karrer
reputation and guaranteeing fulfilment of obligations under ISA, capacity to act ( Handlungsfähigkeit) , proof of appropriate professional qualifications and profes- sional indemnity insurance (Article 41 paragraph 2 ISA in conjunction with Article 186 et seq ISO). In addi- tion, insurance intermediaries (both tied and untied) are subject to information duties vis-à-vis the insured (see 6.1 Obligations of the Insured and Insurer ). Registered insurance intermediaries are not subject to ongoing prudential supervision by FINMA, but FINMA may examine them from time to time to verify their compliance with regulatory requirements. Further- more, in case of any indication of irregularities, FINMA may take enforcement action. Any intermediary activities in Switzerland for the ben- efit of insurance undertakings that fall within the scope of the ISA but are not licensed by FINMA to carry out insurance activities in or from Switzerland are prohib- ited (Article 44 paragraph 1 litera a ISA). Further, an insurance intermediary may not simultaneously act as a tied and non-tied insurance intermediary (Article 44 paragraph 1 litera b ISA). 6. Making an Insurance Contract 6.1 Obligations of the Insured and Insurer When concluding an insurance contract, the poli- cyholder has a duty of disclosure which is limited in its content and scope by written questions or other inquiries provided by the insurance undertaking (Arti- cle 4 paragraph 1 ICA). The insurance undertaking has to proactively seek information as the policyholder does not need to disclose any facts that the insurance undertaking has not asked about. The policyholder must answer the written questions or other inquiries and, in this context, inform the insurance undertaking in writing of all facts relevant to the assessment of the risk, to the extent and as they are known or should have been known to them when the insurance con- tract was concluded. Facts are considered relevant for the risk assessment if they may potentially influence the insurance undertaking’s decision to conclude the insurance contract at all or on the agreed terms (Arti- cle 4 paragraph 2 ICA).
An insurance undertaking must inform the policyhold- er, prior to the conclusion of the contract, of: • the identity of the insurance undertaking; and • the main content of the insurance contract (Article 3 paragraph 1 ICA). It may delegate its information obligations (eg, to an insurance intermediary). However, in relation to third parties (including the policyholder) the insurance undertaking remains solely responsible for the per- formance of the information obligation as Article 3 ICA is mandatory and cannot be contractually modified to the disadvantage of the policyholder (Article 98 ICA), except in the case of credit or surety insurance insofar as it concerns insurance of professional or commer- cial risks, transport insurance and insurance policies with professional policyholders (Article 98a ICA). Furthermore, information duties apply to insurance intermediaries, who must provide their clients with information on, eg, the intermediary’s name and address, whether the insurance intermediation is tied or untied, and if tied, the name and address of the insurance undertaking on whose behalf the interme- diary is acting, the person who can be held liable for negligence, errors or incorrect information in connec- tion with the intermediation activities and the process- ing of personal data. The required information must be formulated in a comprehensible manner and made available to the policyholder at such point in time that the policyholder can know the information when applying for or accepting the insurance contract. The insurance intermediary can make the information available in standardised form on paper or electroni- cally (Article 45 ISA). 6.2 Failure to Comply With Obligations of an Insurance Contract If the policyholder breaches its information duty pursuant to Article 4 ICA and misinforms or fails to inform the insurance undertaking of a material risk factor about which the policyholder was questioned, the insurance undertaking may terminate the contract by written notice within four weeks after it becomes aware of the breach of the information duty (Article 6 ICA). The contract is terminated retroactively, and the insurance undertaking is not liable to pay any benefits
453 CHAMBERS.COM
Powered by FlippingBook