Legally required crisis planning and preparedness for insurance companies

Insurance companies, groups and conglomerates play a central role in the Swiss financial market, particularly in risk transformation. If a major insurer gets into financial difficulties, this can also have a considerable impact on the real economy if, for example, insurance benefits can no longer be adequately provided.

If an insurer gets into financial difficulties, it may no longer be able to fulfil its insurance obligations. This could jeopardise the continuation of its insurance business. Policyholders would be affected by uncertainty over whether their insurance claims will still be paid out on time and in full and whether they will receive any further insurance cover for the risk they want to transfer in the future.

The revised Insurance Supervision Act and the revised Insurance Supervision Ordinance, both of which have been in force since 1 January 2024, give FINMA the power to require insurance groups and conglomerates and economically significant insurance firms to carry out recovery planning.

If recovery is unsuccessful, FINMA has the option of ordering the restructuring or liquidation of the insurer. To this end, FINMA can prepare resolution plans for insurance groups and conglomerates in advance, in which the procedures for restructuring or liquidation are set out, in order to ensure an orderly resolution.