Technical provisions

Insurance companies must create provisions for the contractual obligations they have entered into. FINMA issues rules on this, compliance with which is reviewed at least once a year.

In addition to the Insurance Supervision Act (ISA) and the Insurance Supervision Ordinance (ISO), the FINMA Insurance Supervision Ordinance (ISO-FINMA) regulates the details regarding the type and scope of provisions in the individual insurance sectors. Specifically, the provisions for life insurance are regulated in Articles 28-41 and those for non-life insurance in Articles 42-51.

Supplementary health insurance has specific features associated with the obligation to obtain approval for tariffs. For this reason, special rules apply to this sector, which can be found in Articles 52-54.

Special rules also apply to provisions in connection with reinsurance business, which are listed in Articles 55-56.

Insurance companies must include the principles according to which they form and release their technical provisions in their business plan (Art. 4 para. 2 let. d ISA).

FINMA and the audit firms monitor compliance with the rules usually on an annual basis and also in case of special circumstances. To ensure compliance with these rules, FINMA also carries out on-site supervisory reviews of selected insurance companies.