Development of workers’ compensation insurance legislation continued in the 1930s. The new accident insurance act of 1935 clarified certain ambiguities in the old law. In retrospect, it can be said that at that time, a system was created in Finland the foundations of which remained in place until the end of the century.

Section 6 “An employment accident means any accident causing injury sustained by the employee 1) in the course of his/her employment; 2) in circumstances arising from employment a) at the workplace or in an area pertaining to it; b) while commuting from his/her residence to the workplace or vice versa; c) while attending to business for the employer elsewhere; or 3) while attempting to protect or save the employer's property or, in connection with his/her employment, human life.”

The new law once again expanded the number of people covered by insurance, this time to managers, supervisors, oversees and ship officers whose annual income was below 48,000 Finnish marks.

The reform increased the number of insured workers to 600,000 people.

Compensation for occupational diseases was legislated by a separate decree. The list of substances causing occupational disease decreased to seven: arsenic, lead, mercury, petrol, benzene, coal tar and phosphorus. However, powerful radiation and anthrax remained on the list of exposure agents.

The most significant legislative reform was the introduction of the employer’s own liability. Parliament set the limit of the employer’s liability at 200 marks. In practical terms, this amounted to up to three days of disability of an employee.

The increased political tensions in Europe had also been noted in Finland. In 1938, a law was passed on accidents in the armed forces. It ensured that the next of kin of soldiers injured or killed in service received the same compensation as those granted to workers and their family members by accident insurance legislation.

When the war broke out in 1939, just over 740,000 Finns or about one-fifth of the population of 3.7 million were covered by accident insurance. In November, just a few weeks before the start of the Winter War, member companies of FAII set up pool of funds to cover damages due to war injuries.