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I assume that you're talking about the switch in the center of the unit. It's normally open, but when the piston slides to one side or the other, the switch closes and grounds the circuit -- and the light comes on.
The switch is Volvo p/n 272702-2 (retail Volvo parts counter price, $36.23)
If you don't see any brake fluid leak, the seals inside are still good, and when you do the job, you haven't involved the brake fluid lines and you don't have to flush the system.
The problem is probably due to inevitable corrosion of the contacts inside -- the parts corrode, collapse (for want of a better description) and the pieces ground, closing the circuit.
You have to crawl under the car with a small mirror (e.g., mechanics mirror, good for tight places), a small wrench to fit the lands of the plastic body of the replacement switch, and probably some curved forceps (tweezers, or thin needle nose pliers) to pull out the old pieces (depending on how corroded it is and how much it fell apart).
Unless you have a lift, you'll be working upside down (on your back) with the mirror, but the work is nevertheless intuitive (not brain surgery).
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