Federal government files criminal complaint against former Zug health insurer Klug

The health insurer Klug was forced to withdraw from the insurance business as of 2026 due to insolvency. In connection with unrecorded benefits, the Federal Office of Public Health has now filed a criminal complaint against the insurer.

The small Zug-based health insurer Klug once topped ratings and was among the cheapest health insurers in Switzerland. But the rapid rise was followed by a steep fall: the former company health fund of Landis & Gyr AG ran into trouble due to massive growth from 2022 to 2023. The number of people insured under basic insurance rose from 9,000 to 27,000. The reason for this was the sharp premium increase of an average of 6.6 percent.

Because many of the new policyholders were healthy and younger individuals, the fund had to pay around CHF 8 million into the risk equalization scheme among health insurers. In addition, it had to build up reserves. Klug was unable to shoulder all of this. At the beginning of 2024, according to the Federal Office of Public Health (FOPH), Klug still had only 24 percent of the required reserves and had the lowest solvency ratio of all insurers.

This was followed by the measure of last resort: in September 2024, on the order of the FOPH, the insurer had to implement an extraordinary premium increase, something that rarely occurs. But it was still too late. Around a year later, the FOPH withdrew the insurer’s license and declared it insolvent. As a result, after 107 years, Klug had to cease operations as of 1 January 2026.

According to the FOPH, the insurer’s financial situation deteriorated significantly again in 2025 because it had failed to record benefits amounting to around CHF 2.4 million in its accounting. How exactly this came about is currently still unclear. Due to the various incidents related to these benefits that were not recorded in the accounts, the FOPH has now filed a criminal complaint against the health insurer Klug, as stated in a media release.

The former Zug health insurance company Klug is facing criminal charges from the Federal Office of Public Health    Photo: Severin Bigler, (25. 9. 2025)

Such criminal complaints are rare

In response to an inquiry, Werner Schaeppi of Creafactory AG in Zug, who was previously responsible for Klug’s communications, wrote: “To my regret, we cannot help you further. Klug strictly follows the FOPH’s recommendation to refer media inquiries to its media office.”

Several criminal offenses may be implicated by the benefits amounting to CHF 2.4 million that were not recorded in the accounts, explains Stéphanie Germanier of the FOPH upon request. These include, for example, the formation of insufficient provisions, the violation of information and reporting obligations toward the supervisory authority, or the submission of an incorrect regulatory annual financial statement for 2024.

It is rare for the FOPH to file a criminal complaint against a health insurer. Germanier says: “Since the Health Insurance Supervision Act came into force on 1 January 2016, this has not yet occurred.”

All persons insured with Klug were able to change health insurers independently until the end of 2025. Otherwise, they were automatically transferred to Helsana in accordance with the Health Insurance Ordinance (KGV). Klug policyholders are also covered by the insolvency fund of the 44 health insurers, which the FOPH activated following the declaration of insolvency. The fund ensures that policyholders’ bills are reimbursed even if an insolvent insurer completely runs out of money. Bills with a treatment date from 1 January 2026 onward must be submitted to the new insurer.

As explained in the media release, the FOPH exercises supervision over health insurers operating in the area of social health insurance. The office has a statutory mandate to protect the interests of policyholders, including by monitoring the financial security of insurers.

For bankruptcy proceedings to be opened against a health insurer, the FOPH must either consent to a bankruptcy application by the insurer or itself apply for the opening of bankruptcy proceedings. The FOPH’s supervision of a health insurer ends with the complete withdrawal of the license to carry out compulsory health insurance.