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In its past case law, the Swiss Federal Supreme Court had the opportunity to state that the renunciation by a customer to claim reimbursement for retrocession, in order to allow its manager to perceive it, is subject to certain conditions. In fact, the indication by the asset manager that he receives retrocession is not enough and it is his obligation to provide its client with information allowing him to understand the retrocession’s possible amount.

In a recent ruling, the Swiss Federal Supreme Court goes further and adopts a position of great rigor. Retaining the significant risk of conflict of interest related to the perception of retrocession by the asset manager, the Swiss Federal Supreme Court considers that in order to validly renounce claims and rights to retrocession, it is necessary that the client be informed of the criteria used to calculate the amounts collected by the asset manager.

However, this ruling does not impose the obligation for the asset manager to communicate in full details the amount he collects. The Swiss Federal Supreme Court simply states that the level of information to be provided by the asset manager will be assessed regarding the amount of experience his client has or not, without however, determining the criteria used for this assessment.

It should be noted that the principles laid down by this ruling are consistent with those identified by the FINMA in its Circular 2009 / 1. The latter already sets out guidelines in the field, specifically demanding that the beneficiary of any benefits under contract be defined in it and that customers be informed of the design parameters and ranges of value of all benefits received.

Undoubtedly, litigation relating to retrocession is at its initial stage and it is necessary to stay informed of future case law in this area to see how the questions still pending will be resolved and consequently give a greater legal protection to our financial center which is experiencing uncertainty.