SWITZERLAND Trends and Developments Contributed by: Reto M. Jenny, Andrea Stäubli and Loris Urwyler, Prager Dreifuss AG
The Berne Financial Services Agreement and the Insurance Sector – Revolutionary or Overhyped? Introduction Following the completion of the legislative process in the UK and Switzerland, the Berne Financial Services Agreement (BFSA) is envisaged to enter into force in the beginning of 2026. As part of Switzerland’s Mind the Gap Plus-Strategy, the BFSA does not only aim to maintain pre-Brexit economic relations but also to strengthen them, particularly concerning wealth man- agement, banking, insurance, asset management, and financial market infrastructure. Notably, the BFSA will enable cross-border provision of insurance services. Swiss insurance companies have already been able to provide cross-border ser- vices in the UK. However, the BFSA will provide the basis for UK insurers to operate in Switzerland to a defined extent (namely in clearly defined lines of non- life insurance). While the BFSA has received wide- spread praise, being referred to as “ground-breaking” and “the most ambitious and comprehensive out- comes-based MRA [mutual recognition agreement] in financial services”, its impact on the insurance sector remains to be seen. As part of the implementing steps of the BFSA, a memorandum of understanding between FINMA, the UK Financial Conduct Authority (FCA) and the Bank of England of 22 September 2025 was entered into. Fur- ther, the FCA as well as FINMA have released guide- In Switzerland, there has been freedom of services (with respect to insurance) only in very limited areas on the basis of a bilateral treaty with the Principality of Liechtenstein and on the basis of exemptions in the Swiss Insurance Supervision Act as well as the Swiss Insurance Supervision Ordinance (eg, foreign reinsurance companies to the extent they only provide reinsurance (and no direct insurance) in Switzerland or direct insurance for certain risks – eg, in relation to ocean shipping or cross-border transports). At least, in respect of the EU, there are mitigated regulatory requirements for setting up an agency or branch office in Switzerland to the extent that non-life insurance is concerned. The respective conditions are laid down lines in November 2025. Regulatory environment
in the “Agreement between the European Economic Community and the Swiss Confederation on Direct Insurance other than Life Insurance” of 10 October 1989 (EU-CH DIA, in force since 1993). Following Brexit, in order to ensure continuity and certainty for UK and Swiss non-life insurance companies, the UK and Switzerland signed the “Agreement between the United Kingdom and the Swiss Confederation on direct insurance other than life assurance” of 24 January 2019 (UK-CH DIA, in force since 2021). The UK-CH DIA replicates the terms of the EU-CH DIA. It thus allows non-life insurance companies to branch into one jurisdiction from the other with greater ease through mutual recognition of solvency requirements. The BFSA does not interfere with the UK-CH DIA; rather, Switzerland grants UK-based insurers, under certain conditions and in a limited area, the freedom to provide services in the Swiss insurance market whilst complying with and relying on UK rules and supervi- sion – ie, without being required to comply with Swiss authorisation and most prudential measures. Finally, Article 1 (2)(a-c) of the Swiss Ordinance on the Supervision of Private Insurance Undertakings remains unaffected by the entry into force of the BFSA: foreign insurance companies without a Swiss branch can still offer cover for risks related to ocean shipping, aviation, international transport, risks located outside Switzerland and war risks without being subject to supervision by FINMA (see also BFSA, Annex 4, (VI) (A)(b)(iii)). According to the Swiss government, the BFSA is “unique in terms of approach and scope”. Indeed, the UK and Switzerland built a new regulatory approach by considering “that the domestic regulatory and super- visory frameworks of the other Party achieve equiva- lent outcomes with regard to financial stability, market integrity and the protection of investors and consum- ers within the scope of the Agreement” (BFSA, Article 8), rather than implementing any additional rules sui generis through the agreement. As the preamble of the BFSA sets out, the parties are “desiring to establish a framework […] applicable to certain financial services, taking account of their respective constitutional, legal What will change? In regulatory matters
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