SWITZERLAND Law and Practice Contributed by: Jodok Wicki, Daniel Zemp, Fabienne von Moos and Doruntina Dembogaj, CMS von Erlach Partners Ltd
Market Response International supply chains raise questions about designers, component suppliers, certification and allocation across jurisdictions. Insurers and brokers should review exclusions for novel technologies, iden- tify cover during demonstration and testing, and map mandatory nuclear financial security against conven- tional insurance. Co-ordination is needed to avoid gaps or overlapping limits when one event affects operators, suppliers and project participants. 9. Legislative and Regulatory Key Trends 9.1 Regulatory Focus Areas and Supervisory Trends Conduct and Policyholder Protection FINMA’s supervision of insurers is directed primarily at protecting policyholders and ensuring fair, transparent and well-governed conduct. Insurers are expected to provide clear pre-contractual information, apply pre- cise underwriting questions and handle claims dili- gently. Since the revised ISA took effect on 1 January 2024, FINMA has directly supervised around 12,000 untied insurance intermediaries and has removed intermediaries from the register where requirements were not met. In supplementary health insurance, FINMA has intervened to ensure moderate premium adjustments and, in several cases, premium reduc- tions. These actions create dispute risk where renegotia- tion or remediation follows, although FINMA does not itself decide individual coverage disputes. It is repeated conduct or organisational weaknesses that trigger intervention, with consequences beyond the single case. Operational Resilience and Emerging Risks Cyber-risk and outsourcing concentration are classi- fied as increasing principal risks; nearly half of report- ed attacks in 2025 targeted service providers rather than supervised institutions directly. FINMA expects robust crisis scenarios and appropriate monitoring of outsourced functions.
On artificial intelligence, Guidance 08/2024 sets out supervisory expectations regarding governance and risk management proportionate to the materiality of AI applications; claims handling is an observed use case. Climate- and nature-related financial risks are subject to growing scrutiny, with a new circular applying to insurers from 2026 in stages. In each area, opaque decision-making or weak oversight can make disputes harder to settle and may attract supervisory attention. 9.2 Forthcoming Reforms and Market Impact Civil Procedure and Collective Redress The revised Swiss Civil Procedure Code took effect on 1 January 2025. The reform lowers procedural cost barriers, strengthens conciliation proceedings and simplifies procedural co-ordination of related claims. Cantons may now designate their commercial courts for international commercial disputes and provide for proceedings to be conducted in English. Separately, a Federal Council proposal to expand col- lective redress – including representative actions for damages and collective settlements – was submitted to Parliament in December 2021 but has not yet been enacted. For insurers, the procedural changes already in force, together with the direct action regime under the revised Insurance Contract Act, may increase early- stage defence and settlement costs, particularly in multi-party and cross-border disputes. AI Regulation In February 2025, the Federal Council instructed the Federal Department of Justice and Police (FDJP) to prepare a consultation draft for new AI rules by the end of 2026, with a view to implementing the Council of Europe’s AI Convention and creating the basis for its ratification. The legislation is expected to address transparency, data protection, non-discrimination and oversight. While not insurance-specific, it may affect underwriting algorithms, claims-handling automation and coverage decisions that rely on AI. FINMA has already set out technology-neutral gov- ernance expectations for AI use by supervised insti- tutions (Guidance 08/2024), but the planned federal
240 I NSURANCE L I T IGATI O N 2026
CHAMBERS.COM
Powered by FlippingBook