COVID-19: Regulatory relief for insurers and other supervised persons

While FINMA had already granted temporary relief to banks in the context of the COVID 19 pandemic (FINMA Supervision Communication 2/2020), selective relief for insurance com-panies and financial intermediaries is now also planned.

 

FINMA Supervision Communication 3/2020 provides for the following measures in the insurance sector:

1. SST: Smoothing the yield curves

In order to reduce fluctuations in the Swiss Solvency Test (SST) based on the balance sheet date, FINMA accepts a 10-day average of the yield curves as the basis for calculating the SST. If an insurance company chooses the abovementioned average as the basis for calculating the SST, the choice must be made by application to FINMA. The choice is valid for an entire calendar year and must be disclosed accordingly.

2. Extension of the deadline for reporting

The deadline for the regular reporting, SST reporting and the financial situation report may be extended to 31 May 2020 upon notification to FINMA by 30 April 2020.

3. Reduced SST report

The content of the SST report, which normally must meet the requirements defined in FINMA Circular 17/3, can be reduced. The new minimum requirements are to be communicated to the insurance companies shortly.

 

In addition, financial intermediaries to whom the Agreement on the Code of Conduct for Banks' Due Diligence obligations (CDB 20) applies will find it easier to identify new clients under the Anti-Money Laundering Act. Simple copies of identification documents suffice for the verification of new business relationships which are established by 1 July 2020. An account can then be used so as not to interrupt the normal course of business, and the missing confirmation of authenticity of copies of identity documents can now be provided within 90 days (instead of the previous 30 days). However, this simplification does not apply to any other missing documents and information or to business relationships with increased risks. In these cases, an assessment of the individual case and corresponding documentation requirements will continue to apply. Irrespective of the risk category of the relationship, the missing authentication must be submitted within the specified period of 90 days.

 

Self-regulatory organizations may provide for appropriate facilitations within the framework described above without having to obtain prior approval from FINMA.

April 2020 | Author: Lucy Gordon

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