The revised Insurance Supervision Act and the revised Insurance Supervision Ordinance entered into force on 1 January 2024. The introduction of the new regulation has increased the requirements for insurance intermediation. Insurance companies are also affected by this. The Swiss Financial Market Supervisory Authority FINMA has set out in guidance what it expects from insurers in the area of insurance intermediation, which is covered by the new regulation.
The new regulation not only imposes higher requirements and obligations on intermediaries. Obligations are also imposed on insurance companies in connection with their insurance distribution.
FINMA’s guidance creates transparency about what it expects from insurance companies in the area of insurance intermediation to protect policyholders. These expectations vary and depend on whether the intermediary activities take place on an untied or tied basis.
According to the Insurance Supervision Ordinance, only untied insurance intermediaries are subject to direct supervision by FINMA. Tied insurance intermediaries are legally assigned to the insurance company for which they offer or conclude insurance contracts. This insurance company is directly responsible for monitoring compliance with the statutory requirements of the Insurance Supervision Act (ISA). These include, in particular, a good reputation and guaranteeing that obligations are met, for example, in the area of customer information.
Obligations for cooperation
Even before entering into a cooperation with a tied insurance intermediary, the insurance company must collect the necessary information as part of its risk management process and check whether the supervisory requirements are met. In addition, there are audit items that the insurance company must ensure are complied with and continuously monitor while working with tied intermediaries.
Monitoring by FINMA
FINMA regularly reviews whether insurance companies are complying with their supervisory duties in relation to tied and untied insurance intermediaries and takes action where necessary.
FINMA communicated the new requirements for untied intermediaries in its guidances published in August 2023 and April 2024.
Contact
Patrizia Bickel, Spokesperson
Phone +41 (0)31 327 93 19
patrizia.bickel@finma.ch
