Federal Office of Private Insurance FOPI
Federal Office of Private Insurance FOPI
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Content of supervision
Non-life insurance supervision has as primary objectives the respect for legal and ethical norms, the maintenance of solvency, and thereby the guaranteeing of insurance benefits for the insured parties.
The principal supervision activities with respect to non-life insurers are those that are undertaken for all supervision of private insurance, i.e.:
- review and approval of business plans;
- review of annual reports;
- review of solvency (Solvency I and Swiss Solvency Test, see below)
- review of reports on tied assets.
The rates and terms and conditions for non-life insurance are not subject to advance approval by FOPI, except for insurance against “natural forces”, which has a unique rate, and health insurance. The approval of health insurance rates is the responsibility of the “Health Insurance” division.
Nevertheless, the lack of advance approval does not prevent FOPI from ensuring after the fact that the rates are not disadvantageous to the insured persons, that they do not endanger the solvency of the insurance institution, and that the terms and conditions are in conformity with legislation.
An essential element of non-life insurance supervision is the review of solvency margin of the insurer, i.e., the assets free from all obligations. Articles 27 to 32 and 37 to 40 of the Supervision Ordinance describe the mechanism for calculating the solvency margin of non-life insurers.
Another element is the review of technical reserves, i.e., the obligations toward the insured parties and their coverage by funds assigned to tied assets. The most important reserves for non-life insurers are the reserves for claims; these reserves must guarantee payments for all ongoing claims, whether forecast or not. Articles 68 to 95 of the Supervision Ordinance specify in detail how non-life insurers must cover their obligations toward insured parties.
The legal texts are available on the “Supervision legislation” pages.
The “Non-life Insurance” division complements its supervision by visits to the supervised companies. The division must also respond to requests for information and to complaints by policyholders.
By new orientation of supervision, we mean risk-based supervision. The “Non-life Insurance” division in particular is affected by this new orientation through the introduction of new tools, which are:
- the Swiss Solvency Test (SST), which enables calculation of the capital needs of insurance companies according to their risk profile. More detailed information on this supervision tool is available in the corresponding section.
- a strategy for reviewing risks that is complementary to the SST. Since this tool is still under development, it will be described at a later time.
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