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Cyprus Healthcare


Cyprus has an extensive social security system, but in addition there is a well-developed provident fund industry, independent of the life assurance companies. There are some 2,135 provident funds and a relatively small number of pension funds.

According to the insurance association report, in 1999 the total market premium was CYP 436.6mn (USD 808.5mn), an increase of 113.5% over the prior year. The gross life premium was CYP 338.7mn (USD 627.4mn) and the gross non-life total market premium was CYP 97.8mn (USD 181mn). Provisional figures for the year 2000 show that life premiums will reduce to about CYP 204mn (USD 329mn), a reduction of some 40%. Personal accident and healthcare are included in the non-life premiums, with healthcare being written by the life companies.

The traditional distribution system is through the agency network. Agents are representatives of foreign companies as general agents and of domestic companies as tied agents. Intermediaries are sub agents of either.

Insurance brokers are starting to appear although under current (pre-EU) law must operate as multi-tied agents.? Bancassurance is gaining ground as a consequence of the ownership of some of the large insurance companies by major banks. Direct marketing has not traditionally been seen but two direct marketing insurance companies have been formed and have commenced operations. There are neither tariffs nor compulsory insurances for life or benefits.

Both the Office of the Superintendent of Insurance and the Insurance Association of Cyprus prepares market statistics. The latest confirmed statistics are in respect of 1997, but provisional figures have been released for 1998 and these have been used where appropriate.

Social Security

In October 1980, a comprehensive earnings-related social insurance scheme was introduced replacing an old system that had been operative since 1957. All employees and the self-employed are compulsorily covered by the scheme; non-employed persons may, under certain conditions, join the scheme on a voluntary basis, but voluntary members are not entitled to all the benefits. Expatriate employees of offshore companies are exempt.

Although there is no provision from the social security budget to pay for healthcare, which is currently paid out of general taxation, plans have been made for a comprehensive "national health service", which is described in the healthcare section of this report.

Although the government is taking steps regarding strategy for dealing with demographic trends, the proportion of the old-aged is still lower than other developed countries where fertility declined earlier.

The benefits are not considered as adequate except by the lower income groups. Benefits are received at the rates officially laid down.

The basic scheme, which operated prior to 1980, was on a "pay as you go" basis, but the current scheme is accumulating a surplus, and is thus partially funded. There is encouragement to make provision for old age by means of life assurance and participation in provident funds. A number of pension schemes also exist, principally for the banking sector and some multinationals, notably oil companies.

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