The new rules for participation of life insurance customers in so-called silent reserves in Insurance Contract Act are constitutional. This was decided by Federal Supreme Court in case of a customer whose participation had been massively reduced (AZ. IV ZR 201/17).
The decision was followed by a lawsuit by Covenant of insured (BdV), who wanted to ride more money for withdrawing customers of life insurance. The focus was on so-called valuation reserves, i.e. profits that insurance companies generate by investing ir customers ‘ money in capital market, mostly in fixed-income securities such as government bonds. Customers are involved in profits – according to BdV, however, not enough recently.
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Background is a change of law from year 2014. At that time, legislator reacted to historically low interest rates, capped most of this particular payout and thus helped insurance industry to meet its guarantee commitments. The BdV, however, speaks of an “unconstitutional expropriation”, since only those insured persons are guaranteed a certain amount, whose contracts continue to run longer. In order to ensure this, departing customer has to reduce participation in doubt.
148.95 instead of 2,821.35, 00 euro
As an example, consumer protectionists brought case of a customer of Victoria life insurance company belonging to Ergo group to supreme German civil judges. Instead of original 2,821.35, it had received only 148.95 euros from valuation reserves. For BdV, one case of many: “It is about billions in double-digit range that are to be withheld from insured,” said CEO Axel Alterna, according to a communication.
The BGH judges only partially followed this view. As y had already seen in a previous hearing, y declared regulation to be constitutional – alleging but insurance industry for its intransparency. In future, companies will have to inform ir affected customers of any deviating sums, in such a way that it can be seen that reductions are actually justified by economic situation of insurance.
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That is also why BGH rejected concrete lawsuit for life insurance of Victoria customer back to Düsseldorf district Court. The judges re should again look more closely at wher cuts were actually justified.
