The severe economic recession reduced the number of accidents to record lows. In 1993, the number of reported accidents at work fell below 120,000. The growing unemployment was also visible in statistics: in 1995, the number of insured employees was at its lowest since 1978.

The poor economic times put pressure on public sector finances, and at the beginning of the decade, a working group of the Ministry of Social Affairs and Health looked at the principles of accident and motor insurance compensation in terms of municipal health care. The report assessed options of switching to partial or full cost correlation. In practice, this meant that statutory accident insurance systems would pay a part of the costs of municipal health care.

Ultimately, the working group proposed that insurance systems pay an annual contribution of 330 million marks to offset the costs of treating injured employees in public health care. The insurance sector named the contribution in force between 1993-1996 as the “band-aid tax”. Of the total sum, one half was paid by accident insurance providers.

In addition to the recession, the early 1990s were marked by closer integration with Europe. Finland’s membership in first the EEA and, from 1995, the EU meant increased competition in the national insurance sector. In statutory accident insurance, competition was opened in 1999. The same year, insurance companies were free to set their own premium rates.

The 1990s also saw a restructuring of Finnish working life: after rapid industrialisation and urbanisation in the 1960s and 1970s, the importance of industry began to decline, and the workforce shifted increasingly to the service sector. The change has been reflected in a long-term decline in the number of fatal accidents at work – understandably, as the risk of accident in forestry or industrial work is three times that in service sector jobs.

In 1997, FAII saw significant changes to its operations. As the result of legislative reform, the Federation was given the role of a united centre for occupational accidents, as required by the EU Commission. In this role, the Federation was tasked with ensuring that the rights of insured persons were not weakened by European harmonisation. At the same time, the Federation had to ensure that all parties were consistent in their interpretation of the law.

Under section 64 of the Employment Accidents Insurance Act, “the Federation of Accident Insurance Institutions maintains statistics on employment accidents and occupational diseases under this Act, the Occupational Diseases Act (1343/1988), the Accident Compensation for Civil Servants Act (449/1990) and the compensation paid for them. The same applies to accidents and occupational diseases occurring in State employment for which compensation is paid out of State funds.”

FAII’s role also shifted from operating as an association to increasingly function as a central body and co-ordinator with a legal status. Compensation for damage in uninsured work was transferred from the State Treasury to FAII, as was the management of cases related to places of stay and residence, which were previously the responsibility of Pohjola. In order to carry out the new tasks, FAII set up a compensation department.