The case

Zurich Insurance Group is facing heightened regulatory scrutiny in Switzerland as the Swiss Financial Market Supervisory Authority (FINMA) is examining two separate matters involving the insurer’s pension business and insurance businesses.

Source: International Press and Swiss Press

The commentary

In one case, FINMA is reviewing Vita, Zurich’s collective pension foundation, in order to assess whether it allocated excessive costs to insured members. The investigation could have wider implications for Switzerland’s occupational pension system, in which collective pension foundations manage approximately CHF 600 billion in retirement assets.

In a separate enforcement action, Zurich has dismissed more than 12 employees after discovering that insurance policies were sold at premiums below authorised pricing levels. FINMA has since launched enforcement proceedings and imposed a temporary ban on the sale of certain corporate life and pension insurance products in Switzerland. Chief Executive Officer Mario Greco acknowledged the shortcomings, saying the company regretted not identifying the issue through its internal controls and audit processes.

While the two cases are unrelated, they emphasize increasing regulatory scrutiny of Zurich’s operations and highlight FINMA’s focus on governance, pricing practices and customer protection within Switzerland’s insurance and occupational pension sectors.