Federal Office of Private Insurance FOPI
Federal Office of Private Insurance FOPI
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FOPI News no. 8
FOPI News no. 8 of 22 December 2006 – First statement of accounts for occupational pensions for private Swiss life insurers
For the first time, private Swiss life insurers submitted a complete statement of accounts for occupational pensions in 2005. The Federal Office of Private Insurance FOPI is releasing a comprehensive overview and the Occupational Pension Act figures for the individual insurance companies. Of the total earnings from the savings, risk, and cost processes in the 2005 business year, 92% accrued to insured parties in the form of insurance benefits, increases in technical provisions, and profit participation.
As of the middle of 2006, all private Swiss life insurers offering occupational pensions submitted a separate, complete statement of accounts to FOPI for the first time and in accordance with the applicable ordinance. This statement of accounts includes an earnings statement and balance sheet as well as the technical classification into savings, risk, and cost processes. Additionally, the statement of accounts contains information on the structure of the client base and the principles governing the balance sheet, as well as a binding disclosure scheme on the minimum rate vis-à-vis the insured pension schemes.
92% of total earnings for insured parties
Of the total earnings from the savings, risk, and costs processes in the 2005 business year, insured parties received 92% in the form of insurance benefits, increases and enhancements of the technical provisions, and profit participation.
The operating profit of the actuarial statement of accounts rose slightly relative to the preceding year from CHF 0.55 billion (thousand million) to CHF 0.6 billion. This operating profit – i.e. the share of the insurance undertakings in the total earnings – is used to build up the legally mandated solvency capital and to pay interest on the available risk capital that the insurers need for their guarantee liabilities. Relative to the total technical provisions of CHF 122 billion, this share – which is also referred to as "guarantee costs" – amounts to half a percentage point.
Occupational Pension Act transparency requirements have been fulfilled
Pursuant to the 1st Occupational Pension Act Revision, which entered into force on 1 April 2004, pension schemes must ensure transparency vis-à-vis insured parties with respect to their assets under the Occupational Pension Act.
The primary responsibility of insurance supervision is to ensure that the insurance undertakings meet their transparency responsibilities vis-à-vis the pension schemes. FOPI has therefore called upon the insurance undertakings to compile the figures relevant to the Occupational Pension Act on time and in the mandated form for the pension schemes. In addition to this primary responsibility, FOPI prepares an overall summary of these figures, which have been reviewed by the supervisory authority and auditing firms. Because this process was conducted for the first time, and due to the necessary, time-consuming adjustments, but especially because this task is not the top priority of the regulator, these figures are only now being published. The publication includes the Occupational Pension Act figures of the individual insurance undertakings, many of which have already been publicly available for quite some time.
Insurance undertakings are not pension schemes
Insurance undertakings are not pension schemes, but rather they assume – in whole or in part – risks and capital management. As profit-oriented enterprises, they engage in Occupational Pension Act business within the competitive framework envisaged by public policy. It should not be forgotten that insurance undertakings guarantee their benefits and are solely responsible for bearing their losses in the pension business (in 2002, for example, CHF 2.4 billion). This is unlike autonomous pension schemes, where insufficient coverage and possible recapitalization must be borne by employers and insured parties.
Inquiries: FOPI Communication, tel. 031 325 01 65
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