Insurance laws Switzerland
Switzerland's insurance sector is governed by a comprehensive legal and regulatory framework designed to ensure consumer protection, financial stability, and market integrity.
🏛️ Regulatory Authorities
Swiss Financial Market Supervisory Authority (FINMA): FINMA is the primary regulatory body overseeing insurance companies in Switzerland It ensures that insurers comply with legal requirements and maintain financial solvency to protect policyholders
Federal Office of Public Health (FOPH):The FOPH supervises health insurers, ensuring compliance with the Federal Health Insurance Act (KVG) and overseeing financial stability to protect policyholders' interests
📜 Key Legislation
1. *Insurance Supervision Act (ISA)
The ISA establishes the legal framework for the supervision of insurance companies and intermediaries in Switzerlan. It aims to protect insured persons from abuse and the insolvency risks of insurance companie.
2. *Insurance Contract Act (ICA)
The ICA governs the relationship between insurers and policyholders, covering aspects such as contract formation, rights and obligations of parties, and claims handlin. A significant revision of the ICA came into force on January 1, 2022, introducing measures like a 14-day right of revocation for policyholders and the ability to terminate long-term policies after three year.
3. *Insurance Oversight Act (IOA)
The IOA provides the legal basis for the supervision of private insurance companie. A partial revision of the IOA, effective from January 1, 2024, strengthens consumer protection and introduces measures to enhance the competitiveness and innovation capacity of Switzerland's insurance secto
4. *Swiss Solvency Test (SST)
The SST is a risk-based capital standard for insurance companies in Switzerland, introduced in 200. It assesses the solvency of insurers by evaluating their ability to meet future liabilities under various scenario.
🏢 Licensing and Market Acces
Insurance companies must obtain a license from FINMA to operate in Switzerlad Licensing requirements inclue:
*Legal Form: Insurance companies must be established as limited companies or cooperativs.
*Minimum Capital: Depending on the insurance sector, companies must meet minimum capital requirements ranging from CHF 3 million to CHF 20 millin.
*Solvency: Companies must demonstrate sufficient free and unencumbered equity capitl.
*Business Plan: A detailed business plan outlining the company's activities and financial projectios.
*Foreign Companies: Foreign insurers must establish a branch in Switzerland and appoint a general aget.
⚖️ Consumer Protection and Claims Handling
*Cooling-Off Period: Policyholders have a 14-day right of revocation for insurance contracts, allowing them to cancel the policy without penaly.
*Contract Termination: Long-term insurance policies can be terminated after three years, providing flexibility for policyholdes.
*Claims Limitation: The period of limitation for insurance claims has been increased from two to five years, giving policyholders more time to assert their righs.
🌐 Emerging Trends
*Digitalization: The insurance sector is increasingly adopting digital technologies to enhance customer experience and operational efficiecy.
*Sustainable Insurance: There is a growing focus on integrating environmental, social, and governance (ESG) factors into insurance products and servies.
*Insurtech: The rise of technology-driven insance solutions is transforming traditional business models and creating new opportunities in the market.
RELATED Blog
0 comments