Author Archives: Petra Ginter

Equivalence with Solvency II: Revision of FINMA Regulations for (Re-)Insurers

This article aims to provide an overview of the amendments in FINMA regulations for (re-)insurers between 2015 and 2016. The amendments followed the entering into force of the revised Swiss Insurance Supervision Ordinance (ISO) on 1 July 2015 which was instrumental to secure the European Commission’s recognition of the Swiss insurance supervision system’s equivalence with the EU’s Solvency II Directive of 5 June 2015. In addition to these required amendments, FINMA had the intention to streamline and simplify some aspects of existing regulations and thus consolidated a number of FINMA circulars. Finally, this article points out a few other recent or ongoing revisions that are relevant for the (re-)insurance industry.

By Petra Ginter (Reference: CapLaw-2017-25)

EU Recognises Swiss (Re)Insurance Supervision as Equivalent

On 5 June 2015, the European Commission recognised the Swiss (re)insurance supervision system as being fully equivalent with the Solvency II Directive. The European Commission recognised in particular the equivalence of the Swiss system in three areas, such as reinsurance, solvency calculation and insurance group supervision.

By Petra Ginter (Reference: CapLaw-2015-42)

Partial Revision of the Swiss Insurance Supervision Ordinance

The partial revision of the Swiss Insurance Supervision Ordinance (ISO) initiated by the Federal Finance Department (FFD) in 2014 will enter into force on 1 July 2015. The revision focuses primarily on the themes of solvency, qualitative risk management and disclosure. This article shall give an overview on the various amendments, and in particular on the revised provisions on the eligibility of hybrid instruments as regulatory capital.

By Petra Ginter (Reference: CapLaw-2015-18)

Draft Bill Financial Market Infrastructure Act: Initial Thoughts on the New Rules for OTC-Derivatives

On 13 December 2013, the Federal Council launched the consultation on the Financial Market Infrastructure Act (FMIA). In line with market developments and international requirements, FMIA adjusts the regulation of financial market infrastructure and introduces new rules on derivatives trading. This article, which continues a series of articles on FMIA, focuses on the new rules for over-the-counter (OTC) derivatives.

By Stefan Sulzer/Petra Ginter (Reference: CapLaw-2014-6)

FINMA Opens Consultation on Banking Insolvency

On 16 January 2012 the Swiss Financial Market Supervisory Authority FINMA has opened the consultation on the global revision of the Banking Insolvency Ordinance FINMA (BIO-FINMA). The revision becomes necessary due to the following amendments to the Banking Act:

  • On 1 September 2011, important new provisions on bankruptcy and restructuring laws provided in the Banking Act entered into force (referred to as deposit protection scheme bill).
  • As per 1 March 2012 various parts of the Banking Act have again be amended as part of the “too-big-to-fail” bill.

The proposed draft of the BIO-FINMA shall implement more detailed provisions in particular with respect to restructuring proceedings and the restructuring plan in line with the amendments stemming from both bills mentioned above. As the new BIO-FINMA applies to all banks and securities dealers, the FINMA Bank Bankruptcy Ordinance of 30 June 2005 is to be renamed Ordinance on the Insolvency of Banks and Securities Dealers.

A novelty proposed under the BIO-FINMA is that in an insolvency case it will no longer only be possible to restructure the entire bank, but FINMA can also ensure that important individual banking services are transferred to other legal entities with the goal to protect the financial system and the Swiss economy. In order to raise the capital required for a restructuring, the bank shall be given new contractual instruments: in particular, it will be able to trigger debt-to-equity swaps and statutory bail-ins. The BIOFINMA shall further provide that in certain cases, FINMA may also temporarily suspend existing contractual termination rights of the bank’s counterparties. Other changes aim to result in quick and efficient proceedings, tailored to the relevant case.

The proposed amendments derive to a large extent from the international rules issued by the Financial Stability Board.

The consultation period has ended on 2 March 2012.

FINMA Opens Consultation on Insurance Bankruptcy Ordinance

The Swiss Financial Market Supervisory Authority FINMA has opened consultation on the new Insurance Bankruptcy Ordinance FINMA (IBO-FINMA). Since the Insurance Supervision Act (ISA) has been amended as part of the deposit protection scheme bill on 1 September 2011, FINMA has become responsible for the opening and execution of bankruptcy proceedings over insurers, reinsurers and brokers which are subject to FINMA supervision. Accordingly, the IBO-FINMA will be a necessary implementation of the authority granted to FINMA under the revised ISA. As the amended ISA includes, however, only the basic principles, i.e. the conditions for the opening of a bankruptcy as well as certain principle steps on the bankruptcy proceeding, the new IBO-FINMA shall supplement these provisions in more detail.