Insurance providers will be allowed to conduct undercover investigations starting from 1 October 2019

12. September 2019 – The Swiss electorate approved the amendments to the Federal Act on the General Aspects of Social Security Law on 25 November 2018 (see our news on 26 November 2019). However, their entry into force was delayed due to several appeals filed by the "Referendum against Insurance Spying" Association. On 8 August 2019, the Swiss Federal Supreme Court rejected the appeals. As a consequence, the amendments to the Act as well as its implementing Ordinance will definitely enter into force on 1 October 2019. The new provisions provide a legal basis for insurance companies to investigate suspected fraud cases. Additionally, they regulate the practice of using private investigators for this purpose.

In a 25 November 2018 referendum, the Swiss electorate approved the proposed changes to the Federal Act on the General Aspects of Social Security Law (GASSL). The referendum itself was then challenged by the "Referendum against Insurance Spying" Association, which filed three different complaints with the State Council of the Canton of Zurich. The Association mainly argued that the Federal Social Insurance Office (FSIO) as well as the Swiss National Accident Insurance Fund (Suva) provided partial and misleading information to the public during the referendum. The State Council of the Canton of Zurich dismissed all three complaints. Consequently, the Association appealed to the Swiss Federal Supreme Court.

In its ruling published on Wednesday, 28 August 2019 (available here in German), the Swiss Federal Supreme Court recalled that authorities have a duty to provide correct information and exercise a certain degree of restraint during a referendum procedure. Such principles also apply to Suva or other institutions under direct or indirect influence of a public authority. Nevertheless, the federal judges held in the case at hand that FSIO and Suva informed Swiss citizens with sufficient restraint and that the information they provided did not constitute unlawful intervention in the referendum campaign.

The amendments to the GASSL as well as its implementing Ordinance will enter into force on 1 October 2019. The new provisions will allow insurance providers to conduct undercover investigations on insurance claimants if (i) the social insurance provider has serious evidence that the claimant is receiving or attempting to receive undue social insurance benefits and (ii) other means of inspection would fail or be exceedingly difficult without the undercover observation.

The new provisions on monitoring apply to all insurances covered by the GASSL, namely disability insurance (DI), accident insurance (UV), unemployment insurance (ALV), supplementary benefits (PC), income compensation allowance (EO), military insurance (MI) as well as old-age and survivors’ insurance (OASI).

The new Articles 43a et seq. of the GASSL provide for a wide range of monitoring possibilities: in addition to visual recordings, it is possible to collect sound recordings. Localisation devices such as GPS are authorised only if the insurance company has obtained prior approval from a court (Article 43b GASSL). Nonetheless, the use of instruments that significantly improve human perception skills is prohibited (Article 7i of the implementing Ordinance).

Furthermore, undercover observations are limited in space and time. According to Article 43a para. 4 of the GASSL, undercover observation is only allowed in (a) publicly accessible spaces or (b) spaces which are freely visible from publicly accessible spaces. In this context, Article 7h of the implementing Ordinance specifies that social detectives may conduct their monitoring on public or private property where the public is allowed to enter. Particularly, this provision expressly prohibits monitoring insurance claimants inside their home through the window and in closed spaces, courtyards or even gardens around the house that are not visible from the outside. Undercover observations may be conducted for a maximum of 30 days over a six-month period. This time limit can however be extended under certain conditions (Article 43a para. 5 GASSL).

The insurance provider must fully document each case of investigation. In this respect, the implementing Ordinance sets out the standards for the management, conservation, consultation and destruction of the collected material (Article 8 et seq. of the implementing Ordinance). If the monitoring does not confirm suspicions of fraud, the insurance company must delete the collected material and inform the persons concerned that they have been subject to investigation (Article 9a para. 4 of the implementing Ordinance).