Switzerland and EU adapt their insurance agreement
Bern, 05.07.2018 - Switzerland and the EU have been adapting their Direct Insurance Agreement which has existed since 1989 to the new regulatory requirements. The mixed committee with representatives from both sides adopted the changes on 3 July 2018 and brought them into effect. Thereby the agreement is also in line with the future requirements of the Swiss insurance business.
The 1989 agreement allows non-life insurance companies (e.g. household, motor vehicle, travel, liability insurance) to establish and operate branches in a country of the other contracting party. That is why the agreement establishes a set of regulatory requirements for the commencement of insurance business that insurance companies must meet. A key requirement here is the calculation and fulfilment of capital requirements (solvency).
Switzerland and the EU modernised their systems in recent years to calculate solvency. In 2011, Switzerland introduced the Swiss Solvency Test (SST) and the EU has been applying Solvency II since 1 January 2016. The updated agreement takes these new risk-based systems into account. The adjustment relieves the Swiss non-life insurers and the supervisory authority FINMA, as in future they will only have to apply the SST to calculate the solvency capital.
In addition, due to the various rounds of EU enlargement since 2001, the agreement adjusts the list of valid legal forms of insurance companies and the relevant exchange rate between the euro and the Swiss franc.
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