Switzerland and LiechtensteinWT/TPR/S/208 Page 119
Insurance activities in Liechtenstein are governed by the Insurance Supervision Law63 and the associated ordinance.64 A licence is required for each insurance branch. Insurance undertakings are supervised by the Financial Market Authority. Undertakings must adopt the legal form of a limited company, Societas Europeas, a cooperative, or European Cooperative (SCE). Aside from minimum capital requirements (Sw F 5 million to Sw F 10 million for both life insurers and reinsurance companies; and Sw F 0.5 million to Sw F 1 million for each class of non-life insurance), an organizational fund for formation costs or exceptional business expansion amounting to 20-50% of the minimum capital is required. Exact minimum capital requirements depend on the company's business plan.
Insurance companies are forbidden from undertaking non-insurance activities. The main administration of the company (including accounting) must be situated in Liechtenstein. Undertakings domiciled and licensed in an EEA country may conduct direct insurance business in Liechtenstein without a Liechtenstein licence, as the single-licence principle has applies since the country's accession to the EEA. A company may offer either life or non-life insurance; insurance undertakings engaged in life insurance may not be active in any other branches of insurance apart from supplementary insurance against accidental death, sickness, and invalidity.
Cross-border provision of insurance services by EEA companies is possible, provided the insurance undertakings have the necessary solvency margin. On the basis of a bilateral agreement in force since 1998, insurance undertakings domiciled in Switzerland or Liechtenstein are granted freedom of establishment and operation in the other country. This agreement was extended in 2007 to allow insurance intermediaries to engage in cross-border activities. Other non-EEA-country insurance undertakings require authorization in order to operate in Liechtenstein; they must establish an agency or a branch office in Liechtenstein and have assets available in Liechtenstein equivalent to at least half the guarantee fund. Insurance undertakings with their head office in a foreign country and engaged solely in reinsurance activities are exempt from Liechtenstein supervision.
Liechtenstein imposes a special tax on foreign insurance companies; the rates are 1% on premium receipts from life and pension insurance, and 2% on all other premium receipts. Insurance services are not liable to VAT.
Basic health insurance is compulsory for all persons residing (including foreigners) and/or working in Liechtenstein. It can only be provided by authorized non-profit health insurance companies and covers sickness, maternity, and accident risks (if not covered by compulsory workplace accident insurance) through benefits in cash and in kind as defined by law. All benefits in kind are required to be "effective, appropriate and efficient". Each insured person may choose any of presently four recognized health insurers; these do not have the option to refuse insurance, regardless of age or state of health. Under the Health Insurance Act, insurance companies must offer a uniform premium for adults, which must be accepted by the Office for Health, and a reduced premium (half) for young people (17-20 years); the companies may not ask for a premium for children (0-16 years). Under the Act, the state subsidizes insurance premiums in various direct and indirect ways, e.g. by contributions to the costs of medical care. The recognized insurers are supervised by the Office for Health. Optional insurance may be purchased outside the scope of the compulsory scheme.
Under the compulsory accident insurance, all employees are covered by an insurance contract that must be concluded by every employer against the risks of accidents at work, leisure accidents,
63 LLG 1996, No. 23.
64 LLG 1997, No. 85, in force from 24 January 1997.