The Financial Market Supervisory Authority (FINMA) has found that a health insurance provider in Switzerland has allegedly been passing part of its distribution and management costs onto policyholders. CSS has now been ordered to pay 129 million francs back to customers who took out supplementary health insurance between 2013 and 2019.
FINMA: CSS "responsible for serious violations of supervisory law"
In a report given to 20 minuten, FINMA said that "CSS Versicherung AG was responsible for serious violations of supervisory law from 2013 to 2019. These are based on deficiencies in the area of intermediary business and administrative costs,” which were borne unfairly by policyholders.
The investigation discovered that between 2013 and 2019, CSS had worked closely with a company which offers products like legal insurance and liability insurance, among others. According to 20 minuten, FINMA found that CSS did not adequately record, limit and monitor the "risks" associated with working with said company - which for the purposes of reporting remains anonymous.
CSS allegedly gave economically unjustified contracts to Swiss firm
Between 2012 and 2014, the regulator found that CSS had paid commissions and given work contracts to the company which were “economically unjustified.” Instead of bearing the extra costs internally, at least 129 million francs were added to the premiums of supplemental insurance holders between 2013 and 2019.
While FIRMA did not bring CSS’ services, standards or solvency into question, they did order the company to pay the 129 million francs back to those affected. According to 20 minuten, reimbursement will be determined by the type of product, the duration of the insurance contract and the cost of premiums.
CSS insurance expected to appeal FINMA's decision
In a statement given to 20 minuten, CSS said that “FINMA's decision is not final and CSS can appeal to the Federal Administrative Court. CSS is now analysing the decree in detail and examining how to proceed. Should the ruling become final, CSS will draw up a detailed plan for the refunds and inform its customers, in the area of supplementary insurance, about the amount of payments in the years 2013 to 2019.”
"The largest Swiss basic insurer always adheres to the legal and regulatory requirements," CSS concluded.