As of January 2006, a new insurance system for curative healthcare came into force in the Netherlands. Under the new Health Insurance Act (Zorgverzekeringswet), all residents of the Netherlands are obliged to take out a health insurance. The new system is a private health insurance with social conditions. The system is operated by private health insurance companies; the insurers are obliged to accept every resident in their area of activity. A system of risk equalisation enables the acceptance obligation and prevents direct or indirect risk selection.