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SFMA reviews insurance intermediary supervision and flags remaining abuse risks
SFMA says the revised intermediary framework has improved client protection, while unauthorised activity and abusive sales practices still require action.
The revised Insurance Supervision Act and Insurance Supervision Ordinance have been in force since 1 January 2024 and have materially changed the insurance intermediary market. At a Bern symposium with industry specialists, SFMA reviewed the first two and a half years of the new framework, noting progress in client protection while warning that unauthorised activity remains widespread.
More than 1,000 participants attended the intermediary symposium. SFMA discussed market developments, registration matters and the first supervisory lessons since the revised rules took effect. Around 12,000 untied intermediaries are now registered with SFMA. Since 1 January 2024, more than 7,000 intermediaries have entered the register and around 3,000 have left it.
SFMA also observed a significant level of unauthorised activity and abusive point-of-sale conduct when the new regime began. This is reflected in supervisory findings and in many client complaints. Thousands of insurance clients are affected each year, so client protection remains the authority's central priority.
Supervision is established and effective
The new rules have generally been implemented quickly and consistently. SFMA maintained close dialogue with industry representatives on fundamental questions and implementation issues, including the development of new minimum training standards. The supervisory framework is now established and working. The quality of distribution markets has improved, including through better distribution controls and training standards supported by further training programmes.
Fraudulent practices remain a concern
SFMA still sees a need to combat abuse. Key problems include unsuitable advice from insufficiently qualified intermediaries, life insurance policies sold without transparent cost information or suitability assessments, and weak awareness of information duties. In more serious cases, clients face pressure or unrealistic return promises.
SFMA is also monitoring forged signatures, identity theft, falsified qualifications and continued cold calling, even though cold calling is prohibited. Such conduct is often linked to opaque business models. SFMA estimates that unauthorised operators still account for roughly 10% of all market participants and investigates indications of misconduct decisively.
Follow-up consultations ordered
SFMA has already intervened in many cases, including by stopping distribution. This has removed many insufficiently qualified individuals from the market. Intermediaries who fail to meet their duties receive warnings, serious cases can lead to criminal complaints, and registrations or licences can be removed.
One important instrument is the follow-up consultation, which reviews current insurance cover and seeks fair outcomes for policyholders where needed. SFMA has initiated such consultations at numerous insurers, affecting thousands of clients, and closely monitors both implementation and results.
The desired level of client protection has not yet been fully reached. Distribution misconduct harms policyholders and market participants through reputational damage and higher costs. SFMA expects client-centred advice, products with genuine added value and a critical review of misaligned incentives, including high commissions.