STATUTORY ACCIDENT INSURANCE IN FINLAND

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1 STATUTORY ACCIDENT INSURANCE IN FINLAND FEDERATION OF ACCIDENT INSURANCE INSTITUTIONS

2 Content Statutory Accicident Insurance Scheme in Finland 3 Taking out an insurance 4 Premium base 4 Insurance premiums 5 Who is covered? 6 Working abroad or being employed by a foreign company 7 Incidents to be compensated 8 Compensation payable under statutory accident insurance 9 Free-of-charge appeal procedure 9 Federation of Accident Insurance Institutions TVL 10 Front page photo: Johannes Jansson norden.org

3 Statutory Accident Insurance Scheme in Finland Statutory accident insurance forms part of the Finnish social security system and employment-related social security. An employer is obliged to insure its employees against accidents at work and occupational diseases. Statutory accident insurance is a primary system vis-a-vis other social security. In Finland, statutory accident insurance is based on the Employment Accidents Insurance Act, which defines issues such as the content of statutory accident insurance cover, its practical application and the related pricing principles. Employers take out an insurance policy with a private insurance company. Farmers Social Insurance Institution provides farmers statutory accident insurance. The State Treasury pays out compensation to State employees affected by occupational accidents and diseases. The statutory accident insurance system is funded in its entirety by policyholders, i.e. employers. Labour market organisations participate in developing the content of the statutory accident insurance system. They also participate in the administration of the Federation of Accident Insurance Institutions (TVL). Statutory accident insurance is an open policy, i.e. one policy covers all employees of the employer in question. Since they are automatically covered by the employer s statutory accident insurance, new employees do not need to be notified to the insurer. 3

4 Taking out insurance Employers must take out statutory accident insurance for work performed in an employment relationship. The State and small employers who provide work for 12 days or less in a calendar year are exempted from the duty to take out insurance. At the earliest, the insurance company s liability begins when it receives the insurance application. The insurance must be taken out before the work begins. According to the Employment Accidents Insurance Act, statutory accident insurance must be granted to any employer applying for it. (obligation to contract) If the employer has neglected its duty to take out insurance or the employer is a small employer exempted from the duty to take out insurance, the employee s compensation under the Employment Accidents Insurance Act will be paid by the Federation of Accident Insurance Institutions. TVL collects any compensation it has paid from the employer in question that neglected its duty to take out insurance, up to a limit specified in said Act. Furthermore, an increased charge corresponding to an insurance premium will be imposed on any employer that neglects its duty to take out insurance, for the period of neglect, regardless of whether accidents at work have occurred or not during that period. Premium base Insurance premiums are based on free competition, taking account of the provisions of the Employment Accidents Insurance Act on insurance premiums. The premium must correspond to the risk of accident and occupational disease involved in such work. Every insurance company must have a company-specific premium calculation base, approved by the company s Board of Directors, stating how the insurance premiums are determined and applied. The company must apply this premium base uniformly to all policyholders. 4

5 Key principles laid down for determining insurance premiums are the correlation between risks and costs, the reasonableness and coverage principle, equal treatment of policyholders and the promotion of safety at work. The Financial Supervisory Authority issues an annual report detailing the financial result of each insurance company s statutory insurance policies. Insurance premiums An insurance premium is determined on the basis of the size of the insured interest and the accident risk caused by it. The size of the insured interest, i.e. the amount of work, is determined on the basis of wages and salaries paid to employees. Photo: Magnus Fröderberg norden.org 5

6 The accident risk of the insured interest is determined by employer or risk category. Risk classification is typically based on occupation or industry. The risk is converted into a premium coefficient which shows how risky the work is. Risk is measured by the total claims expenditure for accidents and occupational diseases occurring in the work. Before the beginning of the insurance period, the premium is based on the premium coefficient complying with the insurance company s premium base, as well as the policyholder s notified or evaluated payroll. After the insurance period, these are adjusted to correspond to the policyholder s final payroll and the premium coefficient complying with the insurance company s premium base (equalisation premium). Who is covered? The following are covered by statutory accident insurance: persons in employment, and Government and municipal officials, without age or payroll limits a partner holding a managerial position in a limited liability company and who owns no more than half of the company s capital stock, either alone or jointly with family members a general partner of a limited partnership and a partner of a general partnership holding a managerial position and who owns no more than half of the decision-making authority in the enterprise, either alone or jointly with family members persons in adult labour market training family carers as defined in the Family Carers Act Furthermore, certain special groups, such as students and persons in institutions, have statutory accident insurance cover under a special act during a practical training period. 6

7 A person not covered by statutory accident insurance can be insured against accidents at work by taking out voluntary insurance as defined in the Employment Accidents Insurance Act. It is possible to take out a voluntary accident insurance policy that covers both work and leisure. Also, statutory accident insurance taken out by an employer can cover both work and leisure. Working abroad or being employed by a foreign company Statutory accident insurance is also in force when the employee is temporarily posted abroad by the employer. An employee hired by an employer in Finland is covered by statutory accident insurance, regardless of the employee s nationality or the employer s domicile. Similarly, a Finnish employee hired by a foreign Photo: Johannes Jansson norden.org 7

8 company in Finland must be insured in accordance with Finland s statutory accident insurance system. Incidents to be compensated An accident means a sudden, unpredictable incident caused by an external factor which occurs without the insured s intent and leads to his or her injury or illness. Statutory accident insurance covers: Accidents which take place during the course of employment or in circumstances arising from work, and occurring at the workplace or an area pertaining to it, while commuting from one s residence to the workplace or vice versa, or while attending to business elsewhere on the employer s behalf. Furthermore, an injury sustained by the employee while attempting to protect or save the employer s property or, in connection with his/her employment, while attempting to save a human life, is covered as an employment accident. An assault occurring during the course of employment, or in circumstances arising from work, is also covered as an employment accident. An injury sustained by the employee, arising within a short period of time not exceeding twenty-four hours and not compensable as an occupational disease, such as sore muscles or sinews caused by a working movement, is compensable as an employment accident. An injury arising from war or an armed conflict and sustained by the employee during the course of employment or in circumstances arising from work, where the injury occurs in an area belonging to the workplace, or while commuting from one s residence to the workplace or vice versa, is also considered an employment accident. An occupational disease whose likely principal cause is a physical, chemical or biological factor at work. The causality between disease 8

9 and an exposure factor defined in the legislation and present at work must be established with sufficient probability. Occupational diseases are covered by the insurance institution with which the employer had a valid accident insurance policy, for the job in which the employee was last exposed to the factor causing the disease. Compensation payable under statutory accident insurance The following are paid from statutory accident insurance: as compensation for loss of income, daily allowance for 360 days from the day after the occurrence of the accident and, if the disability continues after this, accident pension examination and medical costs arising from an employment accident or occupational disease, such as medical expenses Photo: Johannes Jansson norden.org 9

10 and medication without a euro-denominated upper limit, travel expenses, certain damage to property and increased costs incurred from home help handicap supplement, clothing supplement and a guide dog supplement compensation for loss of earnings due to physical therapy a handicap allowance paid in compensation for a permanent handicap caused by an accidental injury occupational rehabilitation, including compensation for loss of income during the retraining period medical rehabilitation on the basis of a death benefit: funeral allowance and survivors pension paid to family members Free-of-charge appeal procedure It is possible to appeal against the insurer s decision by submitting a written, free-form appeal to a specific social insurance tribunal, the Accident Appeal Board. The appeal period is 30 days from the day on which the claimant received the insurer s decision. The processing of an appeal in the Accident Appeal Board is free of charge. A decision by the Accident Appeal Board can be appealed against in the Insurance Court. In some cases, the policyholder can apply for leave to appeal to the Supreme Court against a decision by the Insurance Court. 10

11 Federation of Accident Insurance Institutions TVL The principal responsibility of the Federation of Accident Insurance Institutions (TVL) is to coordinate the practical application of statutory accident insurance, as well as developing the insurance system in cooperation with parties in the labour market and the Government. Pursuant to the Employment Accident Insurance Act, every insurance institution underwriting statutory accident insurance in Finland must be a member of TVL. TVL compensates accidents at work occurred in employment not covered by a valid accident insurance policy develops statutory accident insurance and its implementation system promotes the uniformity of the insurance and compensation system acts as the cooperation body for insurance institutions compiles statistics on accidents at work and occupational diseases, as well as their reasons and consequences promotes occupational safety by providing useful statistics and analyses on accidents at work and occupational diseases compensated by insurance institutions An Employment Accident Compensation Board operates under TVL. 11

12 FEDERATION OF ACCIDENT INSURANCE INSTITUTIONS Bulevardi 28, PO Box 275 FI Helsinki Finland