Stefan Walter, director of the Swiss Financial Market Supervisory Authority (FINMA), said on June 19, 2026, that the regulator’s approach to insurance oversight is built on three principles: risk-based, proportional, and sector-specific.
Speaking at the “Tag der Versicherer” (Insurers’ Day) event, Walter emphasized that Switzerland remains a globally significant reinsurance hub and that insurers are among the pillars of the national economy, contributing to GDP, financial security, and capital-market investment.
Walter noted that insurance cash flows are generally predictable and that lapse-driven liquidity risk is limited, since policyholders typically face financial penalties for surrendering policies. He added that the sector benefits from an orderly run-off mechanism — contracts can be transferred or gradually wind down without immediately endangering the broader system. In bankruptcy, tied assets (gebundenes Vermögen) remain available to protect policyholder claims, and targeted rescue measures such as capital actions, equity conversions, or claim reductions are also available.
Nevertheless, he cautioned that the failure of a large insurer or multiple smaller providers could still have significant macroeconomic repercussions, underscoring the need for differentiated regulation that reflects the diversity of insurance business models compared with other financial-sector participants.
Walter pointed to recent partial revisions of the Swiss Insurance Supervision Act (VAG) and its implementing ordinance (AVO) as evidence of this approach. The reforms strengthen policyholder protection at the point of sale — particularly in advice and the disclosure of distribution remuneration — while making investment-regulation principles more flexible. They also ease rules for transactions with professional policyholders.
He highlighted three concrete areas of change.
First, the Prudent Person Principle now governs tied assets. Rather than prescribing specific investment allocations, the rule asks whether an insurer can responsibly manage a chosen asset class. Companies gain freedom, but complex or risky investments — including private credit — require prior FINMA approval. Tied assets continue to serve as the primary policyholder-protection mechanism.
Second, suitability requirements for qualified life-insurance products — those in which the policyholder bears own-loss risk — now demand clearer performance illustrations, itemized cost breakdowns in proposals, and standardized basis information sheets. Insurers must also verify that products match the customer’s situation and knowledge level, and all advisory interactions must be documented and transparent to clients.
Third, intermediary supervision has been tightened, with enhanced training and continuing-education requirements for brokers and strengthened disclosure obligations at the point of sale. Remuneration transparency in unaffiliated intermediary arrangements was also reinforced to expose potential misalignment incentives. Walter noted that FINMA concentrates its resources where systematic abuses are suspected, adding that well-compliant firms “will hardly hear anything from FINMA.”
On the operational side, Walter said FINMA’s Key Account Management Teams conduct data-driven, risk-oriented analyses tailored to each firm’s business model and develop targeted supervisory programs. Horizontal sector-wide reviews complement the firm-specific work, while a new organizational structure pairs account managers with insurance-specific expertise in areas such as capital investments, reserves, health supplemental insurance, and life insurance. The department for Integrated Risk Expertise contributes cross-sectoral knowledge on credit and market risk, cyber risk, governance, anti-money laundering, and sanctions. On-site inspections are being deployed more frequently.
“The ultimate goal,” Walter concluded, “is the right balance between accountability and safety. Only when both come together does the system remain stable and trustworthy.”
