Swiss Financial Supervisory Authority FINMA is continuing to investigate Zürich Lebensversicherungs in relation to its occupational pensions business with partner and multi-employer pension fund Vita Sammelstiftung, IPE understands.
As part of the proceedings, FINMA has imposed a partial sales ban on certain policies offered by Zurich Lebensversicherungs’ corporate life insurance and pension solutions unit after products were offered at lower prices than those agreed with FINMA, Zurich Insurance chief executive officer Mario Greco said in an interview.
Zurich provides Vita Sammelstiftung with reinsurance covering death and disability risks.
The insurer responded to FINMA’s investigation by dismissing at least 12 employees, Greco said.
“It is regrettable that we did not discover the problem ourselves, despite all the audits and checks we conduct,” he added.
Zurich and FINMA declined to comment further on the investigation.
In a statement, Vita Sammelstiftung made clear that it is not involved in the investigation.
The multi-employer pension fund is subject exclusively to the supervision authority for occupational pension schemes and foundations in Ticino, Eastern Switzerland and Zurich (ATIOS), Vita said.
The assets belonging to its members, as well as those of other foundations under the Vita brand, are “secure at all times”, the statement added.
Parting ways in a competitive environment
Life insurers play an important role in Switzerland’s occupational pensions market.
Insurers under supervision, including Swiss Life, AXA, Allianz Suisse and Zurich, manage around one-seventh of all pension assets, insure 40% of active policyholders in Switzerland and serve nearly one-fifth of pension beneficiaries in the country, according to FINMA.
Zurich Lebensversicherung founded Vita Sammelstiftung in 2003 as a legally independent, semi-autonomous foundation. The fund manages €22bn in assets for more than 27,000 companies.
From January next year, however, Vita will become a fully autonomous foundation, taking on death and disability risks in addition to investment risks.
The move comes in response to increasing competition among providers in recent years.
“This decision is part of our strategy for further development. The market has changed in recent years. We have therefore concluded that, as an autonomous collective foundation, we can offer our clients a more competitively priced proposition while maintaining the same level of quality and security,” Vita CEO Rolf Wehrli said in an interview.
For Zurich, Vita’s independence primarily means a realignment of the collaboration rather than an end to the partnership, said Thorsten Schneidewind, CEO of Zurich Life Insurance.
The partners are pooling their resources and focusing entirely on existing clients during the transition phase. Zurich will continue to manage sales and administration on behalf of the foundation.
