31 August 2023

New obligations for insurance intermediaries as of January 1, 2024

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  • Compliance
  • Legal
  • Banking / Insurance
  • Regulatory Compliance

FINMA recently published a guidance note outlining the steps that insurance intermediaries must take this year to comply with the new requirements from 1 January 2024.

  • Raphael Brunner

    Legal Partner

On 21 August 2023, FINMA published a new guidance with an action plan for insurance intermediaries. As already explained in our magazine article on the registration requirement for non-tied insurance intermediaries, the following new obligations will be introduced as of 1 January 2024:

What are the obligations as of January 1, 2024?

Both non-tied and tied insurance intermediaries are subject to obligations for all their business activities:

  • Stricter registration requirements: From 1 January, a stricter registration regime will apply to non-tied insurance intermediaries. In addition, they will not be allowed to start their activities until they have been successfully registered. In particular, they will have to undergo appropriate education and training.
  • Warranty requirement and improper conduct: All types of insurance intermediaries must be of good repute and provide assurances that they meet their regulatory obligations. They must also comply with certain minimum standards of corporate governance. In addition, insurance intermediaries must have appropriate organisational arrangements to ensure that conflicts of interest are avoided in the course of their intermediary activities.
  • Education and training: All types of insurance intermediaries must have the skills and knowledge required for their job.
  • Professional liability insurance: To cover their liability for breach of professional duties of care, all types of insurance intermediaries are required to have professional indemnity insurance against financial loss.
  • Information duties: All types of insurance intermediaries have various information obligations to their policyholders, which must be provided to customers before the contract is concluded.
  • Disclosure and reporting requirements: Non-tied insurance intermediaries must disclose to their clients all types of compensation they receive in connection with the provision of services. They must also provide FINMA with the necessary key figures and information on their activities on an annual basis.

What are the next steps to take?

In order to comply with all obligations from 1 January 2024, insurance intermediaries must take steps to register this year:

It must be clarified whether the activity carried out so far is insurance mediation and what kind of activity it is. Insurance intermediaries are natural or legal persons who advise customers on the conclusion of insurance contracts or who offer insurance contracts. With regard to the type of activity, there is a numerus clausus for insurance intermediaries, according to which the activity can be tied or non-tied. Non-tied activities are those where insurance intermediaries have a fiduciary relationship with policyholders and represent their interests. All others are considered tied intermediaries. Until 17 November 2023, non-tied insurance intermediaries can apply for registration via FINMA's intermediary portal, after which registration will only be possible in writing by post until the end of the year. Insurance intermediaries who are already registered have until 15 December 2023 to check their existing entry in the register; if necessary, changes can be made until this date via the FINMA intermediary portal, after which they can only be made in writing by post.

For insurance intermediaries already working before 1 January 2024, a transitional period of 2 years will apply to the training requirement, i.e. they will have to comply with the training requirement by 1 January 2026.

How must foreign insurance intermediaries proceed?

Non-tied insurance intermediaries acting in their own name must in principle have their registered office, domicile or branch in Switzerland, but FINMA may exempt insurance intermediaries from this requirement. Employees of insurance intermediaries do not necessarily have to be resident in Switzerland. In any case, foreign insurance intermediaries must provide a correspondence address in Switzerland. They have until 30 June 2024 to make the necessary arrangements. This is the responsibility of the foreign insurance intermediaries themselves.

We are happy to assist insurance intermediaries in determining whether they qualify as non-tied and therefore subject to registration and, if so, to guide them through the registration process.
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