Diversity of products
In contrast to social insurance, the benefits arising from voluntary supplemental health insurance are not stipulated by law. Accordingly, the offerings are extremely diverse: Around 1000 products with a wide range of benefits and premiums are currently on the market: In addition to supplemental hospital insurance and insurance for complementary treatments, these include daily sickness allowances and dental insurance.
Review of insurance products
Since 1 January 2006, supplemental health insurance is the only sector alongside collective life insurance where the premiums and insurance contract terms and conditions are subject to approval by FOPI before they can be offered on the market. FOPI reviews whether the terms and conditions are in conformity with law and whether the premiums are within a range that ensures the protection of the insured parties from abuse and the solvency of the insurers. Premiums include all special rates (e.g. rebates, bones systems).
- Solvency protection. To verify whether a premium secures solvency, FOPI reviews whether and to what extent the insurance company can cover its expenses (claims payments, administrative costs, and endowment of the necessary technical reserves) with the premium charged. Should this not be the case, the insurer would have to draw from its equity capital to cover claims, which could threaten the solvency and therefore the survival of the insurer. To prevent this, FOPI does not approve rates that are insufficient. Irrespective of this, an insurance company must at all times hold the requisite reserves and equity capital.
- Protection from abuse. Along with their premium applications, the insurers submit statistics to FOPI on the development of claims payments in recent years and in the coming year, of administrative costs, and of claims reserves. On this basis, FOPI determines whether an application for a premium increase is justified. The law considers premiums exceeding a certain threshold to be abusive. For FOPI to approve a premium, the rate must exhibit a plausible, traceable relationship to the risk and cost development. This approach excludes arbitrary premiums as well as abusive premiums. The same applies mutatis mutandis to the review and approval of rebate systems that are applied to a rate.