During the Winter War in February 1940, the employees’ accident insurance act was extended in scope. In the new law, all work-related accidents caused by war or armed conflict were covered by accident insurance. Immediately after this in March when the war was over, another law was passed ensuring compensation for bodily injuries sustained in the war for those who were otherwise not covered by the employees’ accident insurance act. The latter of these was soon dubbed the air raid act as it was mainly applied to reimburse those who had been injured on the home front.

Compensations for the Winter War were paid mainly from State funds through a separate office. According to statistics by the office in 1943, compensation had been paid to 19,000 wounded, with 20,000 soldiers and 1,000 civilians having lost their lives. All in all, the wounded numbered at 40,000, of whom 1,500 died in military hospitals. There were approximately 10,000 war widows and 20,000 orphans.

Of those wounded in the Winter War, about 5,000 were estimated to have suffered a permanent disability preventing work. To provide care, rehabilitation and vocational training for these wounded, the Invalidisäätiö foundation was established in 1941. FAII donated one million marks as initial funding for the foundation.

FAII’s pool of funds for war damages was prepared to pay out up to 27 million marks in compensation. Ultimately, the pool was used to pay 9.2 million marks for 571 cases, or about one third of the total cash reserves. Most of the compensation was paid to soldiers wounded in the Winter War.

In 1944, FAII set up a committee to oversee employees’ accident insurance claims. The purpose of the committee was to issue opinions in order to harmonise compensation practices. In 1948, however, as the accident insurance act was again reformed, the committee was replaced by the new Employment Accidents Compensation Board, which still operates today.

The most significant reform in the new Employment Accidents Insurance Act of 1948 was ending the differentiation between manual and intellectual work. The change extended the insurance to cover approximately 250,000 salaried employees.

 “Any person who by contract and for remuneration undertakes work for another as an employee, under the employer's direction and supervision.”

The new law also improved the compensation rates and the status of severely disabled persons. The annuity payable for injuries was now divided into a base rate, which was the compensation for a permanent handicap, and a supplementary allowance that covered loss of income.

Legislative reform had been discussed throughout the 1940s. One of the options considered was to transfer all responsibilities related to accident insurance to the state – to socialise the insurance, as member companies of FAII phrased their opposition to the idea. Ultimately in the 1948 law, the situation remained unchanged and insurance continued to be provided by private insurance companies.

FAII’s secretary was Tauno Angervuo (1943-1945), with Toivo Takki (1945) and J. V. Vakio (1945-1954) serving as representatives.