The case

Supervision is strengthening client protection, but further action is needed in order to prevent abuse.

Source: FINMA

The commentary

The revised Insurance Supervision Act (ISA) and Insurance Supervision Ordinance (ISO) entered into force on 1 January 2024, introducing significant reforms to the insurance intermediary market. Two and a half years later, FINMA reviewed the impact of the new framework and noted positive developments in policyholder protection. Yet, supervisory findings indicate that the desired level of client protection has not yet been fully achieved, and a number of individuals continue to operate without the required authorisation. Approximately 12,000 untied insurance intermediaries have been authorised by FINMA.

FINMA emphasises that misconduct in distribution can harm both policyholders and market participants due to reputational damage and increased costs and because of this, FINMA has called for a stronger focus on client-centred advice, products that provide genuine customer value and the review of remuneration structures that may create conflicts of interest, including high commissions. Preventing abuse and protecting clients remain a shared responsibility of all market participants and are essential to maintaining the integrity and reputation of Switzerland as an insurance centre.