From January 1, 2022, the revised law governing Swiss insurance contracts will come into effect, after nearly one year in the works. The revision brings a number of important changes for insurance customers in Switzerland. In this report, online comparison service moneyland.ch explains the biggest changes, looks at what has already been implemented by insurance companies, and explores the actual, practical impacts of the changes.
The changes: Many authorizations which previously required a signature can now also be performed by email, web forms or SMS, for example. That applies to entering into insurance contracts, terminating contracts, and withdrawing from insurance agreements, among other things. The revised insurance law explicitly allows these transactions between insurance companies and customers to be done electronically. However, while the law allows for electronic transactions, it does not require insurance companies to offer these. For example, insurance companies can choose whether or not to offer SMS-based contract terminations.
In practice: Signature-free transactions have already been common for some time, even though these were not explicitly allowed by the insurance law. Many insurance companies told moneyland.ch that taking out insurance without physically signing the contract is already possible (supplementary health insurance from CSS is one example). Helvetia says that it reduced the use of signatures since 2020 due to the coronavirus pandemic.
Nearly all of the insurance companies which moneyland.ch asked confirmed that from January 1, 2022, the bulk of their offers will be available without the need for signatures. Allianz responded by stressing that it depends on how a customer goes about buying insurance. Signatures will remain the standard when insurance is taken out in person. Helsana says it will continue to require hand-written signatures, but customers can choose to submit scans of signed documents instead of sending them by mail.
Some service providers point out that exceptions can apply. This may be the case with personal insurance (at Zurich Insurance, for example) and provisional cover notes (Bâloise). Swiss Life says it is still in the process of reviewing its life insurance offers to determine the cases in which electronic transactions should be offered.
The changes: The revised law introduces an article governing the right to withdraw from insurance contracts. You can now withdraw from a contract up to 14 days after entering into the insurance agreement. The law does not require withdrawal notices to be sent by registered mail, so an insurance company could accept unsigned notices of withdrawal (by email, for example).
In practice: Some insurance companies already offer a right of withdrawal, although the notice period may be shorter than 14 days (Swica has a seven-day notice period, for example). Other service providers, like CSS, do not yet offer a right of withdrawal. All insurance companies questioned confirmed that they will adjust their conditions to accommodate the new 14-day withdrawal period required by law from January 2022. Allianz and Helvetia already implemented the 14-day period in the autumn of 2021.
The rights of withdrawal granted by the revised law do not apply in these cases: Collective personal insurance, provisional cover notes, and insurance agreements with terms shorter than one month.
The new right of withdrawal is a major improvement for consumers, comments moneyland.ch analyst Raphael Knecht. The chance of insurance brokers selling insurance which is not the best fit in order to earn sales commissions is a real one. “Now, consumers who sign up for insurance have two weeks to study the terms and conditions in detail and withdraw from the agreement if they choose to.”
- Rights of termination for long-term contracts
The changes: If you enter into an insurance agreement with a term longer than three years, you have the right to terminate the contract at the end of the third year, or at the end of each year after that. The law requires you to give three months’ notice. “This prevents consumers from being tied into binding agreements with very long terms,” explains Knecht. The new rights of termination do not apply to life insurance.
In practice: Some insurance providers say that this change will make no difference for customers whatsoever. Swica, for example, told moneyland.ch that it only uses one-year contracts for private customers because shorter terms are more customer friendly. Allianz too says that this change will have no effect on its insurance offers. Axa says that in practice, its annual termination rights are often already included in agreements with long contract terms.
On the other hand, around 20 percent of Visana’s contracts have terms of more than three years, as confirmed to moneyland.ch by a spokesperson. Those contracts affect around 150,000 customers. Groupe Mutuel says that the changes primarily effect its health insurance business. Whether or not the new rights of termination will have a major impact on the Swiss insurance landscape is still unclear because many insurance companies were not willing to share figures about affected customers with moneyland.ch.
The new rights of termination apply to both parties. That means your insurance provider can choose to terminate your insurance after three years, even if you agreed to a longer insurance term. Supplemental health insurance is an exception, with only the customer having a right of termination, but not the insurance company.
- Longer period for filing claims in arrears
The changes: From 2022 you will be able to claim on insurance up to five years after a covered hazard occurs. That is more than twice as long as the previous two-year period. If you fail to file a claim when a hazard occurs, you will now have up to five years to correct your mistake and send the claim to the relevant insurance company. The longer period also applies to claims against you by insurance providers – such as claims for unpaid insurance premiums.
In practice: Up until now, most Swiss insurers kept to the required two-year period for accepting retroactive claims. Axa and Helvetia stated that they also offered five-year periods upon request by customers. The new, longer term applies to all contracts which are taken out from January 1, 2022. Insurance companies are not obligated to provide a five-year retroactive claiming period for insurance purchased before that date. Allianz, for example, says that the change only applies to insurance agreements created or altered after January 1, 2022.
Some insurers (like Visana and Zurich) say that they will voluntarily apply the new claims term to existing contracts as well. “It is nice to see some insurance companies take small steps above and beyond what is required by law,” says Knecht.
Note that the longer claims term does not apply to hazards which have already expired. For example, if you received osteopathic treatment on December 31, 2019, and only realize now that an insurance you had would have covered the bill, you could only claim on it retroactively up until December 31, 2021. If you were to wait until January 1, 2022, you would not be able to claim the benefit because the two-year term applicable at the time will have expired.
- Health insurance companies cannot suspend insurance policies
The changes: Health insurance companies can no longer terminate a supplemental health insurance agreement after settling a claim. Only the insured person will be able to suspend a health insurance policy. Collective loss-of-income insurance is an exception to this rule.
In practice: Most supplemental health insurance providers already waive their right to terminate insurance agreements after settling a claim. Even insurers which do not explicitly waive their right to terminate told moneyland.ch that incidents of insurance agreements being suspended by the insurance company are extremely rare. “In practice, very little will change for consumers in this regard,” says Knecht from moneyland.ch.
- Direct claims against a third-party’s liability insurance
The changes: If you incur a loss for which a person who has liability insurance is liable, you can now file a claim directly with their insurance. This change primarily benefits injured third parties, more than insured individuals. “One less roundabout,” comments Knecht.
In the case of compulsory liability insurances, the insured person who is responsible for damages is now explicitly required to provide necessary information. You can also obtain this information directly from the responsible authorities.
In practice: People who suffer injury or loss often do not know whether their losses are covered by a compulsory liability insurance, because insurance requirements can vary between cantons. Whether or not the relevant authorities are aware of their duty to provide information, and how quickly they can provide it, remains to be seen. It should now be easier for injured parties to get in direct contact with the party which is liable for their losses, insofar as that is possible.
Verdict
Many insurance companies say that they have already implemented the revised insurance rules over the course of 2021. This means that in some cases, very little will change for insurance customers come January 1, 2022. This is amplified by the fact that some revisions (like the longer period for filing claims in arrears) do not have to be applied retroactively, and that some of the new rules are already the norm (such as insurance companies waiving their right to suspend policies after settling claims).
“But there are insurance providers which will only adopt the new rules when they become obligatory,” observes moneyland.ch analyst Raphael Knecht. Depending on which insurance companies you use, you may only notice the impact of the changes from the start of 2022.
“Waiting on buying new insurance until January 1, 2022 can make sense,” says Knecht. That way you can be sure that your agreement is based on the new, customer-friendly insurance rules. “However, it is nice to see that many insurance companies go a step further for their customers than what is required by law.”
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