Insurance, Switzerland updates

Supreme Court: scope of full and final settlement clause in insurance matters
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • February 27 2018

The Supreme Court recently dealt with the scope of a full and final settlement clause in an insurance matter. The decision confirms the rules for interpreting settlement agreements in insurance matters and emphasises the importance of carefully drafting the wording of such agreements if they are intended to be full and final settlement agreements of certain insurance claims.

Is surveillance of insured parties lawful?
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • October 24 2017

The European Court of Human Rights recently concluded that Switzerland violated Article 8 of the European Human Rights Convention due to surveillance of an insured party. The case brings uncertainty regarding the extent of observation under Swiss law. Article 8 guarantees the fundamental right to respect private and family life. In its statement, the court held that Swiss federal law offers no precise legal basis for photo and video surveillance of insured parties.

Triggering event for insurance benefits in loss of earnings insurance
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • May 23 2017

In the context of loss of earnings insurance, the Federal Supreme Court recently had to decide whether sickness or the inability to work due to the respective sickness constitutes an insured event and therefore triggers the insurer's duty to provide insurance benefits. The court abandoned its existing case law in which it had appraised the sickness as a primary event for the determination of when the insured event had occurred.

Liability for ongoing daily benefits insurance claims under Freedom of Movement Agreement
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • January 24 2017

The Federal Supreme Court recently ruled that the regulation in the Freedom of Movement Agreement concerning the liability of new daily benefits insurance for ongoing claims that started before the conclusion of an insurance contract under a previous insurance contract does not breach the prohibition of retroactive coverage according to Article 9 of the Insurance Contract Act.

Partial revision of Federal Act on Insurance Contracts
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • September 27 2016

In 2013 the Federal Parliament rejected a bill for a total revision of the Federal Act on Insurance Contracts, with an order to the Federal Council to elaborate a partial revision on selected subjects. In its second attempt to adapt the law to existing standards and policyholders' need for reasonable and feasible insurance protection, the Federal Council drafted an amended bill and recently initiated consultation proceedings on the proposals.

Insufficient disclosure of indicating circumstances in insurance contracts
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • May 17 2016

The Federal Court has ruled that no or insufficient disclosure of indicating circumstances by an insured party falls under Article 6 of the Insurance Contract Act if this information was relevant in determining the probability of the risk which later was realised and caused damage. Further, the court held that the insurer is freed from its contractual payment obligation if it terminated the insurance contract within the required time.

Supreme Court rules on liability policies and claims-made principle
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • January 19 2016

The Federal Supreme Court recently rendered a rare judgment on the temporal scope of liability policies and the claims-made principle. Although it may lead to a broader scope of covered claims, the decision should be seen in a positive light, as it brings additional clarity with regard to the interpretation of claims-made clauses in insurance policies.

Amended rules on insurance supervision
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • October 13 2015

The need for further revision to the Insurance Supervisory Law has been revealed through the introduction of risk-based solvency measuring methods, including the Swiss Solvency Test. The establishment of the test as the sole instrument for testing solvency and a focus on Solvency II will result in harmonisation, while revisions to the Insurance Supervisory Ordinance should see increased reporting efforts.

Nanotechnology – can insurance play a role in regulation?
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • June 16 2015

As highly qualified specialists in risk assessment, reinsurers deal with nanotechnology as an emerging risk. The small amount of available data regarding nanoparticles complicates insurers' risk assessments and has led to calls for future-oriented coping strategies that identify, record and analyse risks and implement appropriate measures. Not all risks are insurable: a risk must be measurable and financially definable to qualify for insurance.

Supreme Court decides on ambiguous clauses in general insurance terms
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • February 24 2015

The Federal Supreme Court recently issued a decision on the rule of ambiguity in the context of the interpretation of general insurance terms. The court found that a provision which excludes accidents as a result of the deliberate causation of a crime or offence is neither considered unusual nor ambiguous, and can therefore validly be relied upon by the insurer.

General insurance terms integral to insurance agreement
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • October 28 2014

The Federal Supreme Court recently held that general terms and conditions can be validly included in an insurance contract even if no reference is made to a particular version or edition, provided that the reference to the general terms and conditions is made expressly in the application form. In such a case, the general terms and conditions in force at the time of signing of the application will apply.

Insurance fraud through omission – qualified duty to act required
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • July 15 2014

The Federal Supreme Court recently quashed a criminal verdict and held that insurance fraud by omission requires a qualified duty of the perpetrator to act. The ruling makes it clear that insurers should enquire regularly into changes in insureds' circumstances. By continuing payment of insurance benefits without enquiry, an insurer cannot hold an insured criminally liable for fraud.

New rules for asset managers of Swiss professional pension insurances
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • June 10 2014

Revisions to the Professional Pension Insurance Act specify requirements for the management of Swiss professional pension insurance assets. The Upper Supervisory Authority for Professional Pension Insurances can now admit both Swiss and foreign financial service providers to manage Swiss professional pension insurance assets. The new law provides for extensive examination of integrity before admission.

Prescription period for paid sick day allowance clarified
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • April 01 2014

A recent Federal Supreme Court case clarified that the general limitation regime applies with regard to the underlying right for loss-of-income insurance, unless a special rule is stipulated. According to the court, the scope of the Insurance Contract Act is limited to individual instalments paid under the insurance contract. The court also defined the point in time at which the limitation period starts running.

FINMA circular on market conduct rules extended to apply to insurers
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • November 19 2013

A revised Financial Market Supervisory Authority circular containing rules on market conduct now applies to insurance companies. Insurers must take the organisational measures necessary to fulfil the duties laid down by the circular. While the insurance industry is sceptical, it remains to be seen what the practical impact on insurers will be.

Strict rules for disclosure of risk factors confirmed
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • August 20 2013

The Federal Supreme Court recently dismissed the appeal of an insured individual who challenged the rescission of a private insurance contract for misrepresentation. The court confirmed the strict rules for the disclosure of conclusive risk factors when concluding private insurance agreements and outlined the reasons which entitle an insurer to terminate a policy for misrepresentation.

Prescription period clarified for benefits under loss-of-income insurance
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • May 14 2013

The Federal Supreme Court recently ruled on the applicable prescription period for loss-of-income insurance. The decision clarifies the prescription period regarding the underlying right for this type of insurance with periodic payments. The draft of the revised Insurance Contracts Act suggests that the prescription period should be amended from two years to five years.

State buildings insurance providers admitted to the private insurance market
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • February 05 2013

The Federal Court recently rendered two decisions in favour of state insurers which hold a monopoly. In its leading case, the court ruled that when insuring buildings under state monopoly, state insurer Glarnersach of Glarus Canton may also compete with private insurance companies. In its second decision, the court dismissed a licence challenge by the Swiss Insurance Association and two private insurers.

FINMA opens consultation regarding liquidity requirements of insurance companies
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • September 25 2012

The Swiss Financial Market Supervisory Authority (FINMA) recently published for consultation a draft of its new circular that aims to illustrate in detail the provisions of supervisory law regarding risk management by defining principles for reporting on liquidity. FINMA requires that insurers file a liquidity report covering the points raised and the criteria outlined in the circular at least once a year.

New bankruptcy ordinance proposed for insurers
BADERTSCHER Rechtsanwälte AG
  • Switzerland
  • June 12 2012

The Financial Market Supervisory Authority has proposed a new Insurance Bankruptcy Ordinance and recently commenced the consultation procedure. The purpose of the draft ordinance is to strengthen the rudimentary framework for bankruptcy proceedings. The common legislative intent behind the new legal provisions is the protection of insureds in the case of an insurer's bankruptcy.

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