The revised Insurance Supervision Act in force since 1 January 2024

Genesis of the revision

The Act of 2004 had been designed in the aftermath of a crisis and reflected the priorities of that moment: solvency, governance and the responsible actuary. Fifteen years later, three gaps had become evident. Swiss law offered no restructuring procedure for insurers comparable to the one available for banks, so that an insurer in difficulty faced a choice between private rescue and bankruptcy. The law applied largely the same protective rules to a private household buying household contents cover and to a multinational corporation placing its property programme with a specialist carrier. Finally, the rules on the distribution of insurance products lagged behind the conduct rules introduced for investment products by the Financial Services Act (FIDLEG) of 2018.

The Federal Council opened the consultation on a partial revision in 2018 and adopted its message to Parliament on 21 October 2020. The regulatory impact assessment of November 2018 summarised the four pillars of the project: a restructuring regime for insurers, a regulatory approach differentiated according to the protection needs of customers, stricter conduct rules for intermediaries and the supervision of branches of foreign reinsurers. Parliament adopted the revised Act on 18 March 2022. The referendum period expired unused on 7 July 2022. Entry into force was originally envisaged for 1 July 2023 but was postponed so that the implementing ordinance could be finalised. On 2 June 2023 the Federal Council adopted the revised Supervision Ordinance and set the revised statute and the ordinance into force on 1 January 2024.¹

The State Secretariat for International Finance describes the result as a customer-protection-based supervisory system, combined with a legal framework that allows insurers to be restructured and with revised provisions on group supervision, intermediaries and insurance distribution. In the language of the reform, the new regime is a “kundenschutzbasiertes Regulierungs- und Aufsichtskonzept”, a regulatory and supervisory concept whose intensity follows the protection needs of the policyholders concerned.²

Customer categories and professional policyholders

The most visible innovation for the Zurich market is the treatment of professional policyholders. Following the Insurance Contract Act, professional policyholders include financial intermediaries under the Banking Act, insurance companies supervised under the VAG, large undertakings that meet certain size criteria and undertakings with professional risk management, while occupational pension institutions are excluded from the category for supervisory purposes. The underlying assumption is that such policyholders can assess the solvency and counterparty risk of an insurer themselves.³

Under Article 30a VAG, insurers may apply to FINMA for exemptions from three requirements when they do business with professional policyholders: the organisation fund, the recovery plan and the tied assets. Before concluding a contract, they must clarify and document the status of the policyholder and inform the policyholder that he is treated as professional and that his claims are not covered by tied assets (Articles 30b and 30c VAG). A breach of these information duties triggers liability under Article 3a VVG. Business that can give rise to claims by non-professional policyholders under compulsory insurance is excluded from the exemption, and occupational pension risks must always be covered by tied assets.⁴ The exemptions apply only to new contracts, significant amendments and customers transferred through new agreements, and insurers that combine professional and retail business must maintain separate reporting for the two portfolios.

Reinsurers benefit from the exemptions automatically under Article 35 paragraph 1 VAG, without the need for an authorisation. The disclosure duties of Articles 30b and 30c do not apply to them. Captive insurers that cover risks of their own group may also apply for exemptions under Article 30d VAG, on the basis of a business plan that separates captive and third-party business.⁵ Captives and insurance-linked structures are discussed in chapter E.V. For the present chapter it suffices to note that the reform brought Swiss law closer to the model of jurisdictions such as Bermuda or the London market, where commercial and reinsurance business is regulated more lightly than retail business, while retaining the Swiss insistence on solvency measured by the SST.

Small insurers and innovation

The revised ordinance introduced two further forms of differentiation. Insurers in supervisory categories 4 and 5 can participate in a small-insurer regime if they meet quantitative and qualitative conditions. They must show an average SST ratio of at least 250 per cent over the last three years, a tied-asset coverage of at least 130 per cent with specified asset types and a permanent coverage of at least 150 per cent of minimum supervisory capital. They must also be free of accumulated losses and of pending supervisory measures or proceedings. Qualifying insurers enjoy simplified SST reporting, reduced disclosure, a lighter audit and exemption from several regular surveys, in exchange for an annual confirmation of compliance with governance and risk-management requirements, due by the end of April.⁶

The ordinance also allows lighter requirements for newly licensed small insurers during their first three years, in order to let them test their business model on the market. Very small activities, such as ancillary insurance cover with low annual premiums, can fall outside supervision altogether. The statutory basis for these exemptions lies in the power of the Federal Council to exempt insurers from supervision or from particular requirements in consideration of factors such as company size and product risk, provided that the protection of policyholders is ensured.⁷

Restructuring and resolution

The core of the revision, from a financial stability perspective, is the new restructuring regime. Under Article 51a VAG, FINMA may, where an insurer faces a risk of insolvency, order protective measures, open restructuring proceedings or declare the insurer bankrupt. Restructuring proceedings under Articles 52a et seq. VAG may be opened when there is a reasonable prospect of restructuring the insurer or of continuing individual insurance services. The restructuring plan may provide for the transfer of all or part of the insurance portfolio to another insurer or to a bridge institution, the reduction and creation of equity capital, the conversion of debt into equity (bail-in), the reduction of claims and the adjustment of insurance contracts.⁸

Two safeguards accompany these powers. Under the “no creditor worse off” principle, no creditor may be placed in a worse position by the restructuring than in an insurance bankruptcy. Where claims are reduced, converted or contracts altered, policyholders may terminate their contracts with immediate effect within three months of being informed. The revision also strengthened the ranking of policyholders in bankruptcy: claims under insurance contracts now belong to the second class of creditors, with claims covered by tied assets satisfied first.⁹ The regime thus combines the Swiss tradition of asset segregation, which goes back to 1930, with resolution tools borrowed from the post-2008 bank resolution framework.

Preparation for a crisis complements the restructuring tools. Economically significant insurers must prepare recovery plans, which the revised statute calls stabilisation plans, showing how they would stabilise themselves sustainably in a crisis through their own measures or private recapitalisation. FINMA may also prepare resolution plans for insurance groups and conglomerates, describing how a restructuring or liquidation would be carried out in an orderly manner. In its annual report for 2025, the authority announced that it would formally assess the recovery plans submitted by insurers beginning with the filings of 2026.¹⁰

Rules of conduct and insurance intermediaries

The Act of 2004 had introduced a register for insurance brokers. The revision of 2022 turned the supervision of intermediaries into a system of conduct regulation modelled in part on the Financial Services Act. Intermediaries are either tied to an insurer or untied. The law now prohibits the same person from acting in both capacities, because an untied intermediary owes a duty of loyalty to the policyholder. Untied intermediaries must be entered in the register kept by FINMA and must show good repute, the necessary professional qualifications and professional liability insurance or equivalent financial security (Article 41 VAG). They must disclose all compensation received from insurers or third parties to their clients and submit annual reports to FINMA. Tied intermediaries, by contrast, are no longer registered with FINMA and may do so only when a foreign state requires a Swiss registration for their activities abroad.¹¹

Insurers remain responsible for the conduct of their tied intermediaries. FINMA expects them to monitor indicators such as cancellations and complaints in order to detect systematic mis-selling, to act when there are indications of abuse and to capture the operational risks of their distribution arrangements. Insurers may not cooperate with unregistered untied intermediaries, and sub-intermediation chains require every link to be registered. All intermediaries must meet minimum standards of knowledge and skills under Article 43 VAG. The industry implemented this duty through the Berufsbildungsverband der Versicherungswirtschaft (VBV), whose minimum standards FINMA recognised in August 2024. They provide for admission examinations in the profiles of life, non-life, voluntary health insurance and multi-line business, and for recertification every two years. Intermediaries had to meet the new training requirements by 1 January 2026.¹²

A special regime applies to the distribution of health insurance. Since 1 September 2024, cold calling for health insurance has been prohibited except where a business relationship exists, where the person was insured with the insurer within the past three years, or where the call follows a recommendation by a known third party. Advisory conversations must be documented in a protocol signed by the client.¹³ These rules respond to decades of complaints about aggressive telephone marketing, which had damaged the reputation of the whole industry.

Qualified life insurance and the key information document

Life insurance products with an investment component had escaped the conduct rules that FIDLEG introduced for financial instruments in 2020. The revised VAG closed this gap by creating the category of qualified life insurance, which covers unit-linked and similar products in which the policyholder bears investment risk, as well as capitalisation transactions. For these products the insurer must prepare a standardised basic information sheet (Basisinformationsblatt) that follows the key information document under FIDLEG as closely as possible (Articles 39b and 39c VAG).¹⁴

Before recommending a qualified life insurance product, the insurer or intermediary must examine whether the product is appropriate for the policyholder and document the policyholder’s knowledge and experience. The documentation must record the suitability assessment or the fact that no recommendation was given. The conduct obligations for qualified life insurance applied in full one year after entry into force. FINMA totally revised its circular on life insurance and moved the transparency rules for life insurers into its ordinance.¹⁵ For private banks and wealth managers in Zurich that distribute insurance wrappers to international clients, these rules are now part of everyday compliance, a subject taken up in chapter E.V.

The ombudsman

The consultation draft of 2018 would have required all insurers and untied intermediaries to join an ombudsman office, following the model of FIDLEG for financial service providers. The regulatory impact assessment expected that such an obligation would multiply the caseload of the existing ombudsman offices. Parliament did not retain a general obligation of this kind and left affiliation voluntary.¹⁶

The absence of a statutory duty does not leave policyholders without an alternative to the courts. The Ombudsman of Private Insurance and of Suva, a foundation with its seat in Zurich, was set up by the insurance association in 1972 and was at the time the first institution of its kind in Europe. Suva joined in 2002. In 2022 the foundation counted 81 private insurers as members, covering about 99 per cent of retail business outside health insurance. Since its foundation it has handled more than 110,000 cases. Its work is free of charge for policyholders and aims to review disputes “neutral, schnell und unbürokratisch”.¹⁷

The ordinances of 2023 and 2024 and the next revision

The Federal Council’s revised Supervision Ordinance of 2 June 2023 and FINMA’s revised Insurance Supervision Ordinance (AVO-FINMA), in force since 1 September 2024, implement the statute in detail. The revised AVO restructured the SST provisions, introduced the small-insurer regime, sharpened the definition of brokers and codified FINMA’s practice on professional liability insurance and corporate governance of intermediaries. It also gave insurers a choice for the composition of their tied assets: they may use individual asset lists approved by FINMA, which allow a broader range of investments, or a predefined short list with lower supervisory costs.¹⁸

The revised regime soon produced an unintended effect. Because the Act required every untied intermediary to be registered with FINMA, highly specialised foreign reinsurance brokers that were not registered in Switzerland began to avoid Swiss reinsurers, shifting business abroad. On 21 May 2025 the Federal Council opened a consultation on a proposal to exempt reinsurance intermediaries from registration and supervision. On 5 December 2025 it adopted the corresponding message to Parliament, which also implements Motion 24.3208. The Federal Council argued that reinsurance business is conducted between insurance companies, so that the protection of end customers is not affected. The State Secretariat expects the amended statute to enter into force in 2027 at the earliest, so that the reinsurance broker exemption was still pending in Parliament in September 2026.¹⁹ For Zurich, where the reinsurance market is concentrated, this correction is of direct practical importance.

Notes

1. Swiss Federal Council, press release “Bundesrat verabschiedet Botschaft zur Teilrevision des Versicherungsaufsichtsgesetzes”, 21 October 2020, https://www.admin.ch/gov/de/start/dokumentation/medienmitteilungen/bundesrat.msg-id-80800.html. EFD, Regulierungsfolgenabschätzung of 14 November 2018 (cited above). SVV, “Was ändert sich mit dem revidierten VAG?” (cited above), which dates the adoption of the revision to 18 March 2022. PwC Switzerland, Teilrevision des Versicherungsaufsichtsgesetzes (VAG), 2022, https://www.pwc.ch/de/publications/2022/Teilrevision%20des%20Versicherungsaufsichtsgesetzes_DE_2022_web.pdf, which refers to the expiry of the referendum period on 7 July 2022 and to the then planned entry into force on 1 July 2023. Swiss Federal Council, press release “Bundesrat stärkt Versicherungsstandort Schweiz”, 2 June 2023, https://www.admin.ch/gov/de/start/dokumentation/medienmitteilungen/bundesrat.msg-id-95538.html; State Secretariat for International Finance (SIF), “Versicherungsaufsichtsgesetz (VAG)”, https://www.sif.admin.ch/de/versicherungsaufsichtsgesetz-vag. ↩
2. SIF, “Versicherungsaufsichtsgesetz (VAG)” (cited above). PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above). ↩
3. FINMA, “Business with professional policyholders – regulations from 1 January 2024” (cited above). ↩
4. FINMA, “Business with professional policyholders” (cited above), on Art. 30a–30d VAG, Art. 111c para. 2 AVO and Art. 3a VVG. ↩
5. FINMA, “Business with professional policyholders” (cited above), sections on reinsurance and on captive insurance. ↩
6. FINMA, “Small insurers regime”, https://www.finma.ch/en/supervision/insurers/small-insurers-regime-and-relief-for-insurers/, referring to Art. 1c AVO. Branches, general health insurers offering supplementary products and primary insurers dealing exclusively with professional counterparties are excluded. ↩
7. EFD, explanatory report of 2 June 2023 (cited above), on Art. 1c–1f and Art. 1h AVO and on the relief for newly licensed small insurers under Art. 1e AVO. PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above), on the exemptions from supervision in the draft ordinance; VAG, consolidated version as at 1 September 2024 (cited above), Art. 2 para. 5. ↩
8. VAG, consolidated version as at 1 September 2024 (cited above), Art. 51a para. 1. PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above), on Art. 52a, 52b, 52e and 52j VAG in the version adopted by Parliament. ↩
9. PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above), on Art. 52j para. 1 let. c, Art. 52e and Art. 54a VAG. ↩
10. VAG, consolidated version as at 1 September 2024 (cited above), Art. 22a; PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above). FINMA, “Legally required crisis planning and preparedness for insurance companies”, https://www.finma.ch/en/enforcement/recovery-und-resolution-n/das-schweizer-too-big-to-fail-konzept/versicherungen/. FINMA, Annual Report 2025, “Measures for promoting stability” (cited above), section on recovery and resolution planning. ↩
11. PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above), on Art. 40 para. 2 VAG. PwC Switzerland, “Neue Regel für Versicherungsvermittler ab 01.01.2024”, https://www.pwc.ch/de/insights/regulierung/neue-regel-fuer-versicherungsvermittler-revidiertes-vag.html. ↩
12. FINMA, “Distribution activities”, https://www.finma.ch/en/supervision/insurers/vertriebstaetigkeit/, referring to Art. 22 para. 1, Art. 44 para. 2 and Art. 45 VAG and to FINMA Guidance 05/2024. VBV, “Mindeststandards für Versicherungsvermittler/-innen – kompakt erklärt”, https://www.vbv.ch/de/versicherungsvermittlung/mindeststandards-kompakt-erklaert. Tied intermediaries who have passed the examination are entered in an industry register kept by the VBV. PwC, “Neue Regel für Versicherungsvermittler ab 01.01.2024” (cited above). ↩
13. Markus Geissbühler, “Die Finanzmarktaufsicht geht gegen unseriöse Versicherungsvermittler vor”, Die Volkswirtschaft, 28 January 2025, https://dievolkswirtschaft.ch/de/2025/01/die-finanzmarktaufsicht-geht-gegen-unserioese-versicherungsvermittler-vor/. ↩
14. SVV, “Was ändert sich mit dem revidierten VAG?” (cited above), on fund-linked policies and capitalisation contracts as qualified life insurance. PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above), on Art. 39b–39c VAG and the alignment with the FIDLEG key information document. ↩
15. PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above), on Art. 39g–39h VAG. FINMA, press releases of 22 August 2023 and 10 July 2024 (cited above), on the revision of Circular 2016/6 “Life insurance” and the transparency rules for life insurers. ↩
16. EFD, Regulierungsfolgenabschätzung of 14 November 2018 (cited above), on the proposed obligation of all intermediation providers to join an ombudsman office. PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above), which notes that Parliament removed the proposed mandatory ombudsman requirement. ↩
17. SVV, “Die Ombudsstelle als Spiegelbild der Schweizer Dialogkultur”, 15 July 2022, https://svv.ch/de/news/branchennews/die-ombudsstelle-als-spiegelbild-der-schweizer-dialogkultur; Ombudsman der Privatversicherung und der Suva, “Über uns”, https://versicherungsombudsman.ch/ueber-uns/. Ombudsman der Privatversicherung und der Suva, “Über uns” (cited above). ↩
18. EFD, explanatory report of 2 June 2023 (cited above), on the SST (Art. 21–31 AVO), the small-insurer regime and the rules for intermediaries (Art. 182a AVO). PwC, Teilrevision des Versicherungsaufsichtsgesetzes (cited above), and EFD, explanatory report of 2 June 2023 (cited above), on the options for tied assets. ↩
19. EFD, press release “Bundesrat eröffnet Vernehmlassung zur Änderung des Versicherungsaufsichtsrechts”, 21 May 2025, https://www.efd.admin.ch/de/newnsb/n6f0epYv7JCVQ2dB3QZEK. SIF, press release “Bundesrat verabschiedet Botschaft zur Änderung des Versicherungsaufsichtsgesetzes”, 5 December 2025, https://www.sif.admin.ch/de/newnsb/KOmV9ADAWyPJggQk0vzLk. The release notes that the proposal received unanimous support in the consultation. SIF, “Versicherungsaufsichtsgesetz (VAG)” (cited above), which states that the next revision is expected to enter into force in 2027 at the earliest. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.