WT/TPR/S/208Trade Policy Review Page 118
insurance companies must offer a uniform premium within each canton, without consideration of the age of new insured entrants. The insurer may only distinguish three categories of premiums within the canton and allow reduced premiums to children and young people in education (between 18 and 25 years). Under the Act, the Confederation and the cantons subsidize sickness insurance premiums for persons with low income. The financial contribution from the Confederation is allocated to the cantons according to their population, their respective financial capacities, and the amount of the premiums. The federal contribution corresponds to 7.5% of the gross cost of the compulsory sickness insurance. All other complementary insurance services are regulated by private laws under the Insurance Contract Law. In order to participate in the basic sickness insurance scheme, sickness insurance suppliers must be organized as an association, mutual association, foundation or joint-stock company without a commercial objective.
Social security consists of old age and surviving spouse pension, disability insurance, unemployment insurance, and loss of earnings benefit and workplace accident and occupational sickness insurance. There are three pillars: the old-age and surviving spouse, and disability insurance61, a highly redistributive public scheme, which is compulsory for all persons living or working in Switzerland; an occupational pension scheme that is compulsory for employees with an annual income exceeding Sw F 19,89062 and optional for self-employed persons (it is designed to enable the insured to maintain current living standards after retirement); and a third pillar consisting of individual savings. Premiums are set by law. Life insurance dominates the provision of old-age pensions under the second pillar of the pension system (obligatory private provision) and the third pillar (voluntary old-age savings).
Insurance services are exempt from VAT. A withholding tax of 8% is levied on settlements from life insurance or 15% on private annuity insurance. The insurance premiums tax is a stamp duty levied on certain insurance premiums at a standard rate of 5%; life insurance premiums are taxed at a reduced rate of 2.5%.
At end 2007, there were 37 insurance undertakings operating in Liechtenstein (13 non-life insurance, 19 life insurance and five reinsurance companies) (Table IV.11). Gross premiums amounted to nearly Sw F 6.9 billion in 2007, 96% of which in life insurance. Total capital investments reached Sw F 22.3 billion in 2007, 96% in life insurance and 3% in reinsurance. Eleven of the 37 companies (six non-life and five reinsurance) operated as captives. In addition, 26 foreign insurance companies (25 Swiss, 1 EC) have established branches in Liechtenstein. By end 2007, over 270 EEA and Swiss insurance undertakings had registered their intention to provide cross-border insurance services, although these undertakings very rarely become active.
Insurance companies in Liechtenstein, 2002-07
(Sw F million, unless otherwise indicated)
Gross premiums written
No. of enterprises
No. of employees
Source:Information provided by the Liechtenstein authorities.
61 Assurance-vieillesse et survivants/Assurance-invalidité, AVS/AI.
62 The threshold was reduced from Sw F 25,320 in January 2005 to Sw F 19,350 in January 2006.