health insuranceCSS will have to reimburse 129 million francs to its document holders
FINMA disclosed that the fund bears a portion of its distribution and management costs at the risk of supplementary policyholders.
CSS Group will have to pay supplemental health insurance premiums of up to 129 million francs. Obtained an order from the Swiss financial market watchdog FINMA, the latter announced in a Tuesday’s statement.
what happened? In April 2020, FINMA opened proceedings against CSS Assurance SA, a subsidiary of the CSS Group under its supervision. “She was guilty of serious violations of the surveillance law between 2013 and 2019,” the regulator denounced.
Supplementary document holders pay a lot
According to FINMA, CSS Assurance SA charged supplemental insurance policyholders only with all costs related to the conclusion of new contracts by outside intermediaries – who were also looking into the field of mandatory insurance – “then it is clear that they were also interested in compulsory health insurance,” she writes.
In addition, FINMA notes that management costs are poorly distributed among policyholders. “Supplementary insurance, for example, for years has taken on the bulk of the marketing costs and all advertising costs for the entire CSS suite,” she explains.
The regulator further specifies that its decision to pay CSS 129 million does not call into question the operating activity of the group. The claims of the insured are guaranteed subject to solvency conditions, he said. His decision has not entered into force and can be appealed to the Federal Administrative Court.
CSS defends itself
In a statement Thursday, CSS, the country’s largest primary insurer, said it was aware of FINMA’s decision. She asserts that she is “amazed at the extent and nature of the criticism directed at it.” It notes that there is still no clear guideline regarding the apportionment of administrative costs. CSS believes it has been performed in accordance with standard theory and practice, a “view also supported by external auditors”.
The group will consider open possibilities regarding the continuation of the procedure. “If the law goes into effect, CSS will develop a detailed payment plan and inform its customers of supplemental insurance between 2013 and 2019 of the amount of payments.”
Who is entitled to a refund?
Premium refunds will benefit people who took supplemental health insurance with CSS Assurance SA between January 1, 2013 and December 31, 2019. The amount of the refund will be made on a case-by-case basis based on the type of product, the term of the contract and the amount of the individual premium paid.