Consultation on occasion of the new health insurer supervisory law

The Federal Council has sent the federal law for the supervisory over social health insurance to consultation. This self-contained federal law is to strengthen the supervisory over health insurers. Among else, the law holds new demands in the field of Corporate Governance, improved intervention possibilities of the supervision for the protection of the insured and strengthened possibilities for sanctions. In addition, the supervision is to be financed by self-support and independent of administration.

In September 2010, the Federal Council decided, on suggestion of the federal departments of the Interior (EDI), that a consultation draft for a self-contained health insurance supervisory law (KVAG) be developed. Therewith, one dispensed of a partial revision of the KVG. The new KVAG includes the following basic values:

Premiums and reserves:

The risk-based calculation of reserves, which is effected by mid-2011, will in addition be anchored legally. In order to secure the solvency of an insurer, the regulatory authority is to be able to determine the premiums anew. In case the premiums of the health insurance companies prove to be inappropriately high, the supervision can demand that a refund to the insured individuals be effected.

Corporate Governance and transparency

Henceforth, only corporations and associations are to be accredited. Health insurer who, based on these regulations, have to adjust their legal form as agency or fund are granted a transition period of five years. Furthermore, “fit and properness” demands from the board of directors and the management are intended. Therewith, the members must possess certain skills and enjoy a good reputation. Dual leadership is not approved of anymore, by which the chairman of the administrative board and is at the same time chairman of the management. The administrative board and management must present the grand total of the compensations.

Supervisory measures

In the past, the regulatory authority had to take different measures for the security and rescue of the insurers, for which sufficient legal basis was lacking. This legal basis is to be created now, so that the regulatory authority can take preventive or securing measures in the future.

Sanctions:

Supervisory-related  elements of offense will be sanctioned more severely. In comparison to current law, monetary fines are raised up to 500.000 francs. Today these range up to only 5000 francs. For delicts and offenses within the execution of health insurances, imprisonment of up to three years is planned.

Financing of supervisory activities:

The activity of the regulatory authority is to be financed in a cost-covering manner. Health insurers and reinsurers are charged with the costs.

The regulatory authority:

The regulatory authority is be transformed into a new, self-contained and of the administration independent authority, analogous to the Federal Financial Market Supervision (FINMA), after at least three years after of the enactment of the KVAG.

The new KVAG has the goal to further on warrant the founding principles of social insurance and ensure an effective supervision. In addition, the activities of the insurers are to be made more transparent, and the regulated competition be strengthened.

Source: http://www.bag.admin.ch/

BAG Bulletin 08/11 download as PDF