Switzerland and LiechtensteinWT/TPR/S/208 Page 117
Insurers with their principal office in Switzerland require approval by FOPI before commencing business; foreign companies whose only business in Switzerland is reinsurance are exempted and are not subject to FOPI supervision; these companies are supervised by their respective home country jurisdiction. Each class of insurance activity requires separate approval. Composite life, non-life, and non-insurance-related operations are not allowed. There is a public monopoly on fire and natural damage insurance (on buildings) in 19 cantons. As part of its social security system, Switzerland maintains a monopoly on accident and occupational disease insurance in certain categories of industries exposed to higher risks, such as construction, forestry, and certain transportation services.56
Minimum fully paid-up capital requirements range from Sw F 3 million to Sw F 8 million for non-life insurers; from Sw F 5 to 12 million for life insurers; and from Sw F 3 million to Sw F 10 million for reinsurance companies. Minimum capital requirements are based on the class with the highest risk amount. Foreign-owned insurance companies must have a representative with residence in Switzerland; this can be either a board member or a director. To cover costs and losses in the initial years of operation, an organizational asset fund must be formed, equal to between 20% and 50% of minimum capital, and available at short notice. Furthermore, class-specific levels of reserves must be available.57
As a general rule, cross-border supply of insurance services is not allowed. However, cross-border supply is allowed for risks related to international transport, war, and any risk located outside Switzerland. Representative offices may not engage in business or act as agents. Foreign insurers establishing in Switzerland must have been in operation for at least three years. The manager of a foreign insurance company must be domiciled in Switzerland and, apart from the organizational fund, the branch must have unrestricted access to assets equal to 50% (for non-life insurance) or 100% (for life insurers) of its minimum guarantee fund.
The 1989 bilateral agreement granting EC non-life insurers the right of establishment in Switzerland (on a reciprocal basis) has made their regulations somewhat less restrictive than for non-EC companies. In particular, in contrast with other foreign non-life insurers, EC non-life insurers are not required to deposit part of their assets with the SNB. Cooperation between the supervision authorities of Switzerland and Liechtenstein is regulated by a bilateral agreement on direct insurance and insurance brokerage.58
Basic sickness and health insurance is compulsory for all residents and can be provided by either recognized non-profit health organizations or private insurance companies; it covers sickness, maternity and accident (if not covered by accident and occupational sickness insurance).59 Optional insurance may also be purchased, but this falls under private insurance law. All insurers offering the basic sickness insurance scheme are obliged to provide identical services, which are defined by law as "effective, appropriate, and efficient"; apart from pharmaceuticals, there is no specific list of benefits for insured persons. Each person may freely choose any health insurer; the latter must not refuse insurance or impose any reservations or qualifying period.60 Under the Sickness Insurance Act,
56 The Federal Law on accident insurance (RS 832.20) is the legal foundation for the national workplace accident insurance.
57 WTO document, GATS/SC/83/Suppl.4.
58 RS 0.961.514.
59 Foreign insurance companies are allowed to invest in real estate up to the value of technical reserves required.
60 Compulsory health insurance is based on the Federal law on health insurance of 18 March 1994, in force from 1 January 1996.