The revised provisions of the Federal Act on the Supervision of Insurance Companies (Insurance Supervision Act, ISA, SR 961.01) and the associated Ordinance on the Supervision of Private Insurance Companies (Supervision Ordinance, SO, SR 961.011) came into force on 1 January 2024. The changes lead to a more strictly regulated insurance brokerage business and significantly improve the legal position of policyholders. Some of the new regulations for better protection of policyholders are explained below.
New rules on insurance mediation
Insurance intermediaries are, as before, persons who offer or conclude insurance contracts in the interests of insurance companies or other persons, irrespective of their designation (Art. 40 para. 1 ISA). However, the function of tied and non-tied insurance intermediaries is now separated and clearly defined. Untied insurance intermediaries have a fiduciary relationship with policyholders and act in their interests (Art. 40 para. 2 ISA), while all other insurance intermediaries are deemed to be tied insurance intermediaries (Art. 40 para. 2 ISA). To avoid conflicts of interest, insurance intermediaries may no longer be both tied and non-tied, but only either tied or non-tied (Art. 44 para. 1 lit. b ISA).
Untied insurance intermediaries must (as before) be entered in the register of untied intermediaries (Art. 41 para. 1 ISA). Tied intermediaries no longer have the unrestricted right to be entered in the register of intermediaries; they can only be entered if they can prove that they wish to take up an activity abroad for which the respective state requires an entry in the register in Switzerland (Art. 42 para. 4 ISA).
The training and further training obligations of insurance intermediaries have now been specified and enshrined in law (Art. 43 ISA in conjunction with Art. 190 f. SO).
Organisational precautions must be taken to avoid conflicts of interest or to prevent policyholders from being disadvantaged (Art. 45a ISA).
In future, independent insurance intermediaries must disclose compensation from insurance companies or other third parties and expressly inform policyholders of this (Art. 45b ISA). The information must include the type and scope of the compensation and be provided before the service is provided.
In connection with qualifying life insurance policies, there is an obligation to provide a basic information sheet, carry out an appropriateness test and document the advice and account for the valuation and development of the financial instruments covered by qualifying life insurance policies (Art. 39b et seq. ISA). This is intended to create a level playing field for insurance policies that have the character of investment products in relation to financial service providers.
According to Art. 80 f. VAG, policyholders are entitled to receive a copy of their dossier and all physical and electronic documents created by the insurance company or intermediary as part of the business relationship at any time. This should enable the customer to recognise any legal claims and assess their prospects of success.
