Zurich dismisses employees after FINMA intervention (cross-border guide)

Context

In brief\

• Zurich has dismissed more than twelve employees for price irregularities.\
• FINMA has started enforcement proceedings on the life division.\
• CEO Mario Greco admits flaws in the company's internal controls.\

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Key facts\

• What: Dismissal of more than 12 employees and partial blockage of sales\
• When: Recently released news after an interview with Bloomberg\
• Where: Switzerland, business life division and pension solutions\
• Who: Zurich Insurance Group and FINMA\
• Amount: Annual profit of the sector involved of about 20 million francs\

\ The Zurich insurance group has recently dismissed more than a dozen employees following an action taken by the Federal Financial Market Supervisory Authority (FINMA). The news was confirmed by CEO Mario Greco in an interview with Bloomberg, highlighting a critical situation within the Swiss division dedicated to corporate life insurance and pension solutions. FINMA has imposed a partial sales ban for some specific policies in this sector, a drastic measure that reflects the seriousness of the irregularities found during supervisory activities.\ \

## The reasons for the enforcement procedure\

\ The heart of the matter lies in a systematic price discrepancy. According to Greco, the procedure was initiated because customers

Operational details

FINMA's intervention against Zurich is part of a very lively national debate regarding the transparency of the Swiss social security system. As reported by publications such as the SonntagsBlick and the Neue Zürcher Zeitung, the case is closely related to discussions about so-called 'rent theft'. This term is used to describe the concern that some market players, including insurance companies and pension fund consultants, charge excessive commissions to policyholders, effectively reducing the capital available for secondo pilastro benefits.\ \

## The role of collective foundations\

\ nCollective foundations in particular are the target of criticism, institutions where the social security savings of one in two employees in Switzerland are deposited. This is a huge amount of money, quantifiable in hundreds of billions of francs, whose management represents an extremely lucrative activity for financial operators. When a company like Zurich offers products at prices that do not comply with the agreements with FINMA, doubts are raised about the correct management of these assets. Swiss occupational pensions, regulated by the LPP, require that management costs and policy rates be transparent and approved to ensure the long-term stability of the system. The current case suggests that competitive pressure in the insurance industry

Useful planning tools

To estimate your pension strategy, use the pension planner and the pillar 3 simulator.

Key points

For those living and working in Switzerland, the news of layoffs and sales restrictions at Zurich highlights the importance of actively monitoring your pension situation. Although the involved unit continues to serve current clients, it is essential that each insured individual understands how their contributions are managed. The first concrete step is to check the annual pension certificate, paying particular attention to the section on administrative costs and asset management expenses. These data should be compared with standard market parameters to identify any anomalies in the applied fees.

Verification procedures for insured individuals

If your company relies on a collective foundation managed by Zurich or another major insurer, you have the right to receive clear information about the cost structure. You can request the management regulation from your employer or directly from the pension fund. If you have doubts about the legitimacy of the applied rates, you can consult the official bulletins of FINMA or contact an independent advisor specialized in occupational pension provision. Remember that every franc saved on commissions today results in a higher pension income at retirement. To get a clear view of how pension contributions affect your net income, you can use our salary calculator, which includes details on LPP deductions. Staying informed about FINMA's decisions and market insurance dynamics is the only way to ensure that your financial future is not compromised by mismanagement or non-compliant pricing practices. Check your position immediately to optimize your second pillar.

Source: swissinfo.ch