Workers’ compensation insurance in brief
Workers’ compensation insurance is a part of statutory social security in Finland. Statutory insurance means that the contents of the insurance, including covered loss events and amounts of compensation, are specified in the Workers’ Compensation Act. The Act also specifies the rights and obligations of each party, and directs insurance and claims processing by imposing time limits for the process, for example.
Statutory social security also includes health insurance, unemployment insurance and disability insurance, for example.
Employers must protects their employees against occupational accidents and occupational diseases by taking out insurance. The insurance must be taken from an insurance company with a legal right to issue the insurance in Finland. These non-life insurance companies are members of the Workers’ Compensation Center (TVK). When the employer submits an insurance application to an insurance company, the company must issue the insurance.
The State does not need to take out separate insurance for its employees. The State Treasury pays out compensation to State employees affected by occupational accidents and diseases from state funds.
Workers’ compensation insurance is an open policy. The insurance covers all employees working for the employer at any given time. Whether or not the injured person is covered by the insurance is determined when processing the claim. Employers that have taken out compulsory workers’ compensation insurance for employees can supplement it with voluntary leisure-time insurance
Private non-life insurance companies perform a public administrative duty
Workers’ compensation insurance is issued by private non-life insurance companies. In this task, the companies carry out a public administrative duty and function as public authorities. In this context, the companies’ activities are governed by the Administrative Procedure Act and the Language Act, among other legislation. The companies’ activities are supervised by the Parliamentary Ombudsman and the Financial Supervisory Authority.
Companies set their own premium basis
Each insurance company has its own premium basis by which they determine the amount of insurance premium. The law only specifies the principles which insurance companies must follow. Insurance premiums must take into consideration factors such as protecting the interests of insured persons and the risk of occupational accidents and occupational diseases. The bases for calculating insurance premiums are not public.
Incidents to be compensated and the amount of compensation are defined by law
Workers’ compensation insurance pays out compensation for occupational accidents and occupational diseases. The law ensures compensation for hospital treatment, loss of income and permanent handicap, for example. It also covers rehabilitation that allows the employee to return to work. In the event of death, survivors' pension provides financial security to next of kin
Workers’ compensation takes precedence
The workers’ compensation insurance system takes precedence over other social security systems. This means that compensation paid out from any other insurance or benefit do not reduce the amount of compensation paid from workers’ compensation insurance. Compensation paid from workers’ compensation insurance is deducted from other forms of insurance. If their amount of compensation is higher than that of workers’ compensation insurance, the excess is paid to the employee as an additional compensation.
Injuries suffered in uninsured work are covered
Employees are always entitled to compensation in the event of an occupational accident or occupational disease. If the employer is not legally obligated to take out insurance or has neglected his duty to insure the employee, TVK processes the claim and pays out compensation.
If an employer liable to take out insurance has failed to insure his employees, or the insurance is with a foreign insurance company that does not have a licence to operate in Finland, for example, the employer is guilty of neglecting his duty to take out insurance.