The Circular on "Provisions in reinsurance" published today by the Swiss Financial Supervisory Authority sets minimum requirements for appropriate technical provisions in the reinsurance business.
The FINMA Circular on "Provisions in reinsurance" sets down the rules that are stipulated in the law and its associated ordinance. Up to now, there have been no specific prescriptions on regulating technical provisions in the reinsurance business. This Circular governs the determination of market-consistent technical provisions for the Swiss Solvency Test, while on the other hand it regulates the statutory technical provisions. It determines principles and minimum requirements for the valuation, documentation and control of technical provisions. The Circular is directed at all Swiss reinsurance companies and reinsurance captives as well as at direct insurance companies for reinsurance assumed and retroceded business. The Circular is to enter into force on 1 September 2011.
Changes to the consultation draft
FINMA received seven responses to the consultation draft circular. Based on these reactions, particular focus has also been placed in this Circular on requirements for the determination of statutory technical provisions which were not foreseen in the consultation draft document.
Tobias Lux, Media Spokesperson, phone +41 (0)31 327 91 71, email@example.com