| Law on the Supervision of Insurance Undertakings (Versicherungsaufsichtsgesetz - VAG) |
Short Title: Insurance Supervision Law
Fully amended version as at January 2000
Translation provided by the Bundesaufsichtsamt für das Versicherungswesen (Federal Insurance Supervisory Office) and reproduced with kind permission.
Table of Contents
I. Introductory provisions
Section 1
Section 2
Section 3
Section 4
II. Authorisation to do business
Section 5
Section 6
Section 7
Section 7a
Section 8
Section 8a
Section 9
Section 10
Section 10a
Section 11
Section 11a
Section 11b
Section 11c
Section 11d
Section 11e
Section 12
Section 12a
Section 12b
Section 12c
Section 12d
Section 12e
Section 13
Section 13a
Section 13b
Section 13c
Section 13d
Section 14
Section 14a
III. Mutual Societies
Section 15
Section 16
Section 17
Section 18
Section 19
Section 20
Section 21
Section 22
Section 23
Section 24
Section 25
Section 26
Section 27
Section 28
Section 29
Section 30
Section 31
Section 32
Section 33
Section 34
Section 35
Section 35a
Section 36
Section 36a
Section 36b
Section 37
Section 38
Section 39
Section 40
Section 41
Section 42
Section 43
Section 44
Section 44a to c
Section 45
Section 46
Section 47
Section 48
Section 49
Section 50
Section 51
Section 52
Section 53
Section 53a
Section 53b
IV. Management of insurance undertakings
1. Financial resources, investments
Section 53c
Section 53d
Section 54
Section 54a
Section 54b
Section 54c
Section 54d
1a. Accounting, auditing
Section 55
Section 55a
Section 56
Section 56a
Section 56b
Section 57
Section 58
Section 59
Section 60
Section 61 to 63
Section 64
2. Special provisions on the mathematical provisions and the Deckungsstock in life insurance
Section 65
Section 66
Section 67
Section 68 and 69
Section 70
Section 71
Section 72
Section 73
Section 74
Section 75
Section 76
Section 77
Section 78
Section 79
Section 79a
Section 80
V. Supervision of insurance undertakings
1. Duties and powers of the supervisory authorities
Section 81
Section 81a
Section 81b
Section 81c
Section 81d
Section 81e
Section 82
Section 83
Section 84
Section 85
Section 86
Section 87
Section 87a
Section 88
Section 89
Section 89a
2. Bundesaufsichtsamt für das Versicherungswesen
Section 90
Section 91
Section 92
Section 93
Section 94 to 100
Section 101
Section 102
Section 103
Section 103a
Va. Supervision of the holders of qualifying participations in insurance undertakings
Section 104
VI. Insurance undertakings which have their head office abroad
1. Undertakings whose office is not in an EC Member State or EEA Member State
Section 105
Section 106
Section 106a
Section 106b
Section 106c
Section 107
Section 108
Section 109
Section 110
2. Undertakings which have their head office in an EC Member State or another EEA Member State
Section 110a
Section 110b
Section 110c
Section 110d
Sections 110e to 110i
Section 111
VIa. Cooperation of the Bundesaufsichtsamt für das Versicherungswesen with the competent authorities of the other EC Member States or another EEA Member State in the field of direct insurance
Section 111a
Section 111b
Section 111c
Section 111d
Section 111e
VIb. Notifications to the EC Commission
Section 111 f
VII. Building societies
VIII. Transitional provisions
Section 122
Section 123
Sections 124 to 127
Section 128
Sections 129 to 133e
Section 133f
Section 133g
IX. Provisions concerning offences and administrative fines
Section 134
Sections 135 and 136
Section 137
Section 138
Section 139
Section 140
Section 141
Section 142
Section 143
Section 144
Section 144a
Section 144b
Section 145
Section 145a
Section 145b
X. Final provisions
Section 146
Sections 147 to 149
Section 150
Section 151
Section 152
Section 153
Section 154
Section 155
Section 156
Section 156a
Section 157
Section 157a
Section 158
Section 159
Section 160
Section 161
XI. Transitional provisions for the implementation of the monetary, economic and social union with the German Democratic Republic
A. Classification of risks according to classes of insurance
B. Description of authorisations granted for more than one class of insurance
C. Matching Rules
D Consumer Information
Section 1
Section 2
(1) Subject to supervision under this law shall be undertakings which carry on insurance business and which do not write social insurance (insurance undertakings).
(2) For the purpose of undertakings which exclusively operate reinsurance business and which do not have the legal form of a mutual society only sections 55 to 59, 83, 89a, 93 below and sections 101 to 103, 137, 138 and 150 below shall apply; section 2 below shall apply accordingly. For the purpose of undertakings under public law of the civil service or the churches which exclusively provide for old age, invalidity or survivor's benefits only section 13 (1) below, sections 14, 54 (2) below, first sentence, (a), and second sentence, section 55 (1) and (2) below, section 55a below and sections 81, 81a, 82, 83, 86, 88, 89, 89a and 93 below shall apply; for the purpose of insurance undertakings of this kind established under state (Land) law and subject to state supervision, the law of the state may provide otherwise. The Federal Finance Minister shall have the power to exempt from supervision under this law by way of an ordinance not subject to approval by the Bundesrat insurance undertakings under public law within the meaning of the second sentence which are not subject to state supervision if taking into account the legal requirements for the establishment of such undertakings or the agreements existing between the undertakings and their operators it is not deemed necessary to supervise such undertakings for the purpose of safeguarding the interests of the insured.
(3) Not subject to supervision under this law shall be
1. associations of persons which grant their members benefits without their having a legal claim to such benefits, in particular relief funds and relief societies of professional associations;
1a. relief funds established by guilds under the Handwerksordnung (Handicrafts Regulation Law);
2. alliances having legal capacity of chambers of industry and commerce and trade associations if the purpose of such alliances is to balance for their members the burden of benefit payments, to which they have committed themselves, by way of assessment and if such alliances have been granted their legal capacity by the government;
3. alliances not having legal capacity of local governments and associations of local governments if their purpose is to balance by way of assessment losses as described in the following resulting from risks taken by their members and by undertakings operated to comply with the duties of public authorities and in which one or several members or - in the case of b) - other regional and/or local authorities hold a share of at least 50 per cent, such as
a) losses for which the members or their staff may be held responsible by third parties in compliance with legal liability provisions,
b) losses arising from keeping motor vehicles,
c) benefits paid under the local government officials' accident compensation scheme;
4. corporations and public institutions where insurance relationships are established by act of law, or which have to be entered into subject to a legal requirement;
5. undertakings operating within narrow territorial limits which grant benefits in the case of the occurrence of an uncertain event against payment of a lump sum provided such benefits do not consist in cash benefits, taking over of the costs or indemnity against liability with respect to third parties.
(4) Business listed under classes 23 and 24 of part A of the annex shall not be covered by the scope of application of this law unless it is carried on by insurance undertakings which have been authorised to operate the classes of insurance under 19 to 21 of part A of the annex; in this case such business shall be treated in the same way as life insurance business. Capital redemption operations (class 23 of part A of the annex) shall be any business operations where period of time and amount of the single or periodical premiums fixed in advance and of the liabilities have been determined in accordance with an actuarial method. Business for the purpose of class 24 of part A of the annex shall be the management of schemes which pay benefits on death or on reaching a certain age or in the case of impairment of the earning capacity, including the investment and management of the assets. For the purpose of business in accordance with the third sentence the insurance undertakings may in connection with such management also give guarantees with respect to the conservation of the managed capital and a minimum interest rate. Death benefit funds may not operate business specified in the first to fourth sentences, while pension funds may not operate business specified in the first, second and fourth sentences.
The supervisory authority shall decide whether an undertaking is subject to supervision in accordance with section 1 above; this decision is binding on the administrative authorities. A decision made by a court or an administrative authority before 1st April, 1931, shall not be deemed to conflict with a decision made by the supervisory authority.
If rules relating to the board of directors or the supervisory board have been stipulated in this law and if insurance undertakings under public law do not have bodies so designated the relevant executive body shall take the place of the board of directors and the relevant supervisory body shall take the place of the supervisory board.
(repealed)
(1) Insurance undertakings may not carry on business unless authorised to do so by the supervisory authority.
(2) The operating plan shall be submitted together with the application for authorisation; it shall disclose the purpose and organisation of the undertaking, the area of the intended business operations and in particular clearly state the conditions which shall secure that the future liabilities of the undertaking can permanently be met.
(3) As part of the operating plan shall be submitted
1. the articles of association in so far as they do not refer to general insurance policy conditions,
2. information about the classes of insurance it intends to carry on and which risks of a class of insurance it intends to cover including designation and object of the insurance coverage; in the case of pension and death benefit funds the general insurance policy conditions and documents such as in particular the rates and principles for the calculation of the premiums and mathematical provisions including the calculation bases and mathematical formulas used,
3. affiliation agreements as specified under sections 291 and 292 of the Aktiengesetz (Public Limited Companies Law)
4. agreements for the purpose of permanently transferring distribution, management of the portfolio of insurance contracts, handling of claims, accounting, investments or asset management of an insurance undertaking wholly or an essential part of it to another undertaking (outsourcing).
(4) The operating plan shall give evidence of the existence of own funds in the amount of the minimum guarantee fund (section 53c (2) below). Their composition shall be disclosed. In addition, estimates shall be submitted for the first three financial years with respect to the expenses for commissions and other current operating expenses, the expected premiums, the expected expenses for claims incurred and the expected liquidity situation. In this connection it shall be stated the financial means expected to be available to meet the liabilities under the insurance contracts and the requirements with respect to the financial resources.
(5) In addition, the following shall be submitted
1. as regards health insurance within the meaning of section 12 (1) below and compulsory insurances the general insurance policy conditions,
1a. as regards health insurance within the meaning of section 12 (1) below the principles for the calculation of the premiums and mathematical provisions including the calculation bases and mathematical formulas used,
2. information about the intended reinsurance,
3. an estimate of the expenses for setting up the administrative services and the organisation for securing business; the undertaking shall prove that it disposes of the necessary funds for this purpose (organisation fund),
4. if an application is filed for authorisation to carry on insurance class 18 of part A of the annex information about the means of which the undertaking disposes to provide the promised assistance,
5. as regards the managers and directors the information necessary to judge their good repute and qualification (section 7a (1) below),
6. if any qualifying participations are held in an insurance undertaking (section 7a (2) below, third sentence)
a) disclosure of the holders and amounts of such participations,
b) information about the facts necessary to judge the requirements under section 7a (2) below, first and second sentences,
c) if such holders have to establish annual accounts, the annual accounts of the last three financial years including the audit reports of independent auditors if such reports have to be established, and
d) if such holders belong to a group of undertakings, information about the structure of the group and if annual accounts have to be established the consolidated accounts of the last three financial years including the audit reports of independent auditors if such reports have to be established,
6a. information about close relations existing between the insurance undertaking and another natural or legal person (section 8 (1), fourth sentence),
7. as regards the responsible actuary information necessary to judge his good repute and qualification (section 11a (1) below, sections 11e and 12 (2) below, second sentence).
(6) The Federal Finance Ministry shall have the power to lay down, by way of ordinance, provisions with respect to the nature, extent, and date of submission of the information to be provided in accordance with subsection 5 (5) and (6) above, section 13d (1) (2) (4) and (5) below to the extent that this is required for the supervisory authority to fulfil its duties. The above power may be transferred by ordinance to the BAV which shall stipulate the regulations in consultation with the supervisory authorities of the Länder (states).
(1) The authorisation shall not be granted for a limited period of time unless otherwise provided for in the operating plan. It shall be granted, notwithstanding any limitation of the application, for the territory of all Member States of the European Community (EC) and all the other Member States of the European Economic Area (EEA) as provided for in the Anpassungsprotokoll (Adjustment Protocol) of 17th March, 1993 (BGBl. (Federal Law Gazette) 1993 II, p. 1294).
(2) The authorisation shall be granted for each class of insurance separately. It shall cover the entire class of insurance unless the undertaking intends to cover only part of the risks of such class of insurance in accordance with its operating plan.
(3) The authorisation may also be granted jointly for several classes of insurance under designations specified in part B of the annex.
(4) The authorisation granted for one or several classes of insurance shall also include coverage of additional risks of other classes of insurance if these risks relate to the risk of a class of insurance operated, concern the same object and are covered by the same contract. Risks of classes 14, 15 and 17 of part A of the annex shall not be deemed to be additional risks for the purpose of an authorisation granted for other classes of insurance. Risks of class 17 of part A of the annex which meet the requirements of the first sentence shall be covered by an authorisation granted for other classes of insurance if they refer to disputes or claims arising from the operation of ships on sea or relating to such operation or if the authorisation is granted for carrying on class 18 (a) of part A of the annex.
(1) An authorisation may only be granted to public limited companies, mutual societies and corporations and institutions under public law.
(1a) The head office must be located within the country.
(2) The insurance undertakings shall be permitted to carry on in addition to insurance business only such other business as is directly related to it. Such a relationship shall be deemed to exist if in the case of dealings in futures, options and other financial instruments these are to serve as security against the risk of changes in market prices and interest rates of existing assets or of future purchases of securities or if any additional return is to be realised on existing securities without this resulting in any insufficient representation of the restricted assets when delivery commitments are met.
(1) The directors and managers of insurance undertakings shall be of good repute and professionally qualified. A prerequisite of professional qualification shall be sufficient theoretical and practical knowledge of insurance business and management experience. This shall be deemed to be the case if the director or manager can furnish proof of having held a managerial position with an insurance undertaking of comparable size and type of business for at least three years. Directors and managers shall be the natural persons who have been appointed in accordance with the law or articles of association or as authorised agents of a branch in an EC Member State or another EEA Member State to manage the business affairs and represent the insurance undertaking.
(2) The holders of a qualified participation in the insurance undertaking shall meet the requirements for the purpose of a sound and prudent management of the insurance undertaking and in particular be of good repute. If the participation is held by legal persons or partnerships the same shall apply to the natural persons who have been appointed in accordance with the law or articles of association to manage the business affairs and represent the insurance undertaking and the personally liable partners. A qualified participation shall be deemed to exist if either directly or indirectly through one or several subsidiaries at least 10 per cent of the nominal capital or voting rights of an insurance undertaking are held, or if at least 10 per cent of the members funds of a mutual society (section 22 below) have been subscribed, or if even though this percentage is not reached a decisive influence can be exercised on the management. As regards computation of the share of the voting rights, article 7, first sentence, of Council directive 88/627/EEC of 12th December 1988, on the information to be disclosed for the purchase and sale of a qualified participation in a listed undertaking (OJ of the EC No. L 348, p. 62) shall apply. Full allowance shall be made of the indirectly held participations for the purpose of the undertaking holding the indirect participations. Subsidiaries shall be deemed to be undertakings which are subsidiaries within the meaning of section 290 of the Handelsgesetzbuch (Commercial Code) irrespective of their legal form and head office; every subsidiary of a subsidiary shall also be deemed to be a subsidiary of the parent undertaking which exercises common control. Parent undertakings shall be deemed to be undertakings which are parent undertakings within the meaning of section 290 of the Handelsgesetzbuch irrespective of their legal form and head office.
(1) Authorisation shall not be granted if
1. there are facts from which it may be concluded that the directors and managers do not meet the requirements under section 7a (1) above,
2. there are facts from which it may be concluded that the requirements of section 7a (2) above, first and second sentences, have not been met,
3. it has become apparent from the operating plan and the documents submitted in accordance with section 5 (4), third and fourth sentences, and subsection 5 above that the interests of the insured are not adequately safeguarded or the liabilities under the insurance contracts cannot be sufficiently deemed to be permanently fulfilled.
Authorisation may be refused if the insurance undertaking is affiliated to the holder of a qualified participation (section 7a (2) above, third sentence) and if because of this affiliation (section 15 of the Aktiengesetz) or the structure of the affiliation of the holder of the qualified participation to other undertakings does not permit any effective supervision of the insurance undertaking. The same shall apply if effective supervision of the insurance undertaking is not possible due to close links with another natural or legal person or due to the laws, regulations and administrative provisions of a non-EEA Member State applying to such a person. Close links shall be deemed to exist if
1. the insurance undertaking and a natural or another legal person are linked by virtue of a participation of at least 20 per cent of the nominal capital, voting rights or members funds, held either directly or indirectly through one or several subsidiaries;
2. the insurance undertaking and another undertaking are parent undertaking and subsidiary according to section 7a (2), sixth and seventh sentences, or if the insurance undertaking is linked in a similar way to a natural or another legal person.
Authorisation may also be refused if contrary to section 5 (5) above no sufficient information or documents have been submitted with the application.
(1a) The authorisation to carry on life insurance (classes 19 to 24 of part A of the annex) and the authorisation to carry on other classes of insurance shall be mutually exclusive. The same shall apply to the granting of an authorisation to carry on health insurance within the meaning of section 12 (1) below and of an authorisation to carry on other classes of insurance.
(2) An authorisation may be granted subject to certain requirements having been met.
(3) The supervisory authority shall defer decision on the application for authorisation or limit the authorisation following a decision by the Commission or Council of the European Communities which was taken in pursuance of article 29b (4) of the first Council directive 73/239/EEC of 24th July, 1973, on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct insurance other than life assurance (OJ of the EC No. L 228, p. 3), or article 32b (4) of the first Council directive 79/267/EEC of 5th March, 1979, on the coordination of laws, regulations and administrative provisions relating to the taking-up and pursuit of the business of direct life assurance (OJ of the EC No. L 63, p. 1). Such deferral or limitation shall not exceed three months from the date on which such decision was taken. The first and second sentences shall also be applicable to proposals for authorisation submitted after the date when the decision was taken. If the Council of the European Communities decides to prolong the period of time according to the second sentence the supervisory authority shall observe such prolongation.
(4) Authorisation may not be refused for reasons other than those mentioned under subsections 1 and 1a above.
(1) An insurance undertaking which carries on legal expenses insurance together with other classes of insurance shall transfer the handling of claims under legal expenses insurance to another undertaking whose legal form is as specified under section 7 (1) above or that of another corporation (loss adjustment firm). Any such transfer shall be deemed to be an act of outsourcing.
(2) The loss adjustment firm shall not carry on any classes of insurance other than legal expenses insurance and not handle any claims in other classes of insurance.
(3) Section 7a (1) above shall apply accordingly to the directors and managers of the loss adjustment firm. They shall not carry out activities for an insurance undertaking which operates other classes of insurance in addition to legal expenses insurance. Employees entrusted with the handling of claims shall not be permitted to carry out any similar activity for such an insurance undertaking.
(4) The members of the board of directors and the employees of an insurance undertaking pursuant to subsection 1 above shall not give any instructions to the loss adjustment firm with respect to the handling of individual claims. The directors and managers and the employees of the loss adjustment firm shall not supply any such insurance undertaking with information which could lead to clashes of interests to the disadvantage of the insured.
(5) Subsections 1 to 4 above shall not apply to legal expenses insurance if it concerns disputes or claims resulting from the operation of ships on sea or if it is related to such operation.
The articles of association of an insurance undertaking shall include the individual classes of insurance to be carried on and specify the principles of investment; they shall also specify whether insurance business is to be operated only directly or also indirectly (by way of reinsurance).
(1) The general insurance policy conditions shall contain full information about:-
1. the events upon the occurrence of which the insurer shall be liable to pay benefits and the cases where for special reasons this liability shall be excluded or suspended;
2. the nature and size of the benefits of the insurer and when they fall due;
3. the date when the premium falls due and the legal consequences of a delay in payment;
4. the rights of the applicant and the insurer to influence the contents of the contract and the obligations and duties to disclose before and after loss occurrence;
5. the forfeiture of an insurance claim if periods stipulated are not observed;
6. the domestic jurisdictions;
7. the principles and standards according to which the insured participate in the surplus.
(2) The provisions of subsection 1 above may be incorporated in the articles of association of mutual societies and insurance undertakings under public law instead of the general insurance policy conditions.
(3) Subsection 1 above shall not be applicable to reinsurance and the large risks mentioned in article 10 (1) of the Einführungsgesetz zu dem Gesetz über den Versicherungsvertrag (Introductory Law of the Insurance Contract Law).
(1) The insurance undertakings shall ensure that the policyholder, if he is a natural person, is informed by way of information given to the consumer about the essential facts and rights under the insurance contract before the insurance contract is concluded and during the term of the contract in accordance with part D of the annex. In the case of large risks pursuant to article 10 (1) of the Einführungsgesetz zu dem Gesetz über den Versicherungsvertrag it shall be sufficient to mention the applicable law and the competent supervisory authority.
(1a) Prior to the conclusion of a private health insurance contract, the person interested in taking out the insurance shall confirm receipt of an official information sheet issued by the Federal Insurance Supervisory Office and explaining the different principles on which the public and private health insurance systems are based.
(2) The consumer information shall be clearly listed in writing and provided in unambiguous and comprehensible German language or native language of the policyholder.
(3) The number of proposals for the conclusion of legally independent insurance contracts covered by any proposal form shall only be such as not to affect clarity, legibility and comprehensibility. The applicant shall be informed in writing emphasising, in particular, the legal independence of the contracts for which proposals have been submitted including the relevant insurance policy conditions, and the periods of validity of the proposals and the terms of the contracts.
(1) Premiums in life insurance shall be sufficient on reasonable actuarial assumptions for the insurance undertakings to meet all their liabilities, and, in particular to establish adequate mathematical provisions for the individual contracts. For this purpose, the financial situation of an insurance undertaking may be taken into account, without any systematic and permanent use of input from resources other than premiums being permitted.
(2) If the prerequisites are the same, the same principles shall be used to calculate both premiums and benefits.
(1) Every life insurance undertaking shall appoint a responsible actuary. He shall be of good repute and professionally qualified. To meet the qualification requirement the actuary shall dispose of adequate knowledge in the field of actuarial theory and professional experience. He shall be deemed to dispose of adequate professional experience if he can furnish proof of having carried on an activity as actuary for at least three years.
(2) Before appointing the envisaged responsible actuary the insurance undertaking shall inform the supervisory authority and provide it with the necessary information to judge his good repute and professional qualification in accordance with subsection 1 above. If there is evidence of the envisaged responsible actuary not meeting the good-repute or qualification requirement, the supervisory authority may require that another person be appointed. If after the appointment there should be evidence of certain circumstances which would have prevented his appointment or if the responsible actuary does not properly fulfil his duties set out in this law, the supervisory authority may require that another responsible actuary be appointed.
If in the cases mentioned in the second and third sentences also the envisaged or the freshly appointed responsible actuary does not meet the requirements or if no fresh appointment is made, the supervisory authority may appoint a responsible actuary itself. Whenever the appointment of the responsible actuary comes to an end, the supervisory authority shall be informed without delay.
(3) The duties of the responsible actuary shall be as follows:-
1. He shall ensure that both the premiums and mathematical provisions are calculated in accordance with the principles of section 11 above and the ordinances issued pursuant to section 65 (1) below and section 341f of the Handelsgesetzbuch. He shall investigate the financial situation of the undertaking in particular as to whether the undertaking is in a position to meet its liabilities under the insurance contracts at any time and whether it disposes of adequate resources in the amount of the solvency margin.
2. Other than in the case of a kleinerer Verein (mutual society with limited activity) (section 53 (1) below, first sentence) he shall certify at the end of the balance sheet that the mathematical provision has been established in accordance with section 341f of the Handelsgesetzbuch and the ordinances issued in accordance with section 65 (1) below (actuarial certification); section 341k of the Handelsgesetzbuch relating to auditing shall not be affected. He shall specify in a report to the board of directors of the undertaking the underlying calculation bases and any additional assumptions for his certification.
3. As soon as he realises on performing his legal duties that he will possibly not be able to grant a certification in accordance with paragraph 2 above or be able to grant only a qualified certification, he shall inform the board of directors and, if the board does not take any remedial action immediately, the supervisory authority without delay.
4. For the purpose of insurance contracts with profit participation he shall submit to the board of directors proposals for adequate participation in such profits.
(4) The board of directors of the undertaking shall be obliged
1. to make available to the responsible actuary all the necessary information which will enable him to fulfil his duties properly in pursuance of subsection 3 above, and
2. to deposit with the supervisory authority the report with respect to actuarial certification in accordance with subsection 3 (2) above.
(5) Death benefit and pension funds which do not meet the requirement of section 156a (3) below, fifth sentence, shall not be subject to subsection 3 (1), first sentence and paragraph 2, second sentence, and subsection 4 (2) above. The obligation to investigate pursuant to subsection 3 (1) above, second sentence, shall also apply in these cases. Subsection 3 (2) above, first sentence, shall apply subject to the requirement that the certification mentioned is replaced by a certification to the effect that the mathematical provision has been established in compliance with the approved operating plan (actuarial certification).
(6) The Federal Finance Ministry shall have the power to lay down by ordinance the wording of the actuarial certificate and any further details regarding the contents and scope of the report to which subsection 3 (2) and subsection 5 above relate and the period available for submission of the report. This power may be transferred by ordinance to the BAV which shall stipulate regulations in consultation with the supervisory authorities of the states (Länder).
If the insurance policy conditions of life insurance contracts concluded after 28th July, 1994, permit to change the premiums and the provisions concerning profit participation of existing insurance contracts, any such changes may not become effective unless they have been approved by an independent trustee. Section 12b (3) and (4) below and section 12d (2) below shall apply to the trustee accordingly. Approval by an independent trustee shall not be required if changes in accordance with the first sentence have to be approved by the supervisory authority.
As regards life insurance contracts concluded before 29th July, 1994, (existing contracts) the operating plan approved by the supervisory authority before that date shall remain fully applicable. Section 13 (1) below in conjunction with section 8 (1), first sentence, paragraph 3 above shall apply to changes of the operating plan. Section 11a (1) (2) and (4) above shall apply accordingly and subsection 3 above subject to the requirement that the mathematical provision has to be calculated in accordance with the applicable operating plan.
If accident insurance undertakings write insurances with premium refunds sections 11 to 11c above shall apply accordingly
Für die Berechnung der Deckungsrückstellung von Renten in der Allgemeinen Haftpflichtversicherung, der Kraftfahrzeug-Haftpflichtversicherung, der Kraftfahrt-Unfallversicherung sowie der Allgemeinen Unfallversicherung ohne Rückgewähr der Prämie gilt § 11a entsprechend.
(1) To the extent that health insurance is appropriate to be a substitute for compulsory health insurance (substitutive health insurance) wholly or partly it shall be treated in the same way as life insurance within the country, whereby
1. the premiums shall be calculated in accordance with actuarial principles on the basis of probability tables and other pertinent statistical data taking into account, in particular, any relevant assumptions with respect to the invalidity and sickness risk, mortality, dependence of the risk on age and sex and probability of cancellation and taking into account safety loadings and other loadings and a maximum technical interest rate of 3.5 per cent,
2. the old age provision shall be established in accordance with section 341f of the Handelsgesetzbuch,
3. in the insurance contract the right of the insurance undertaking to a contractual or statutory notice of termination, in hospital daily allowance insurance from the fourth year of insurance at the latest, shall be excluded and a premium increase shall be permitted,
4. the policyholder shall be granted in the insurance contract the right to modify the contract by choosing other rates with comparable coverage while the rights and old age provision entitlements acquired so far under the contract shall be maintained.
(2) Insurance undertakings writing substitutive health insurance shall appoint a responsible actuary. Section 11a (1), second to fourth sentences, and subsection 2 above shall apply accordingly.
(3) The duties of the responsible actuary shall be as follows:-
1. He shall ensure that in calculating both the premiums and mathematical provisions in particular old age provision the actuarial methods (subsection 1 (1) and (2) above) are followed and the regulations of the ordinance issued in pursuance of section 12c below are observed. He shall investigate the financial situation of the undertaking in particular as to whether the undertaking is in a position to meet its liabilities under the insurance contracts at any time and whether it disposes of adequate resources in the amount of the solvency margin.
2. He shall certify at the end of the balance sheet that the old age provision has been calculated in accordance with paragraph 1 above (actuarial certification). This does not apply to kleinere Vereine (section 53 (1) below, first sentence).
Section 11a (3) (3) and subsection 4 (1) above shall apply accordingly.
(4) As regards substitutive health insurance section 11 (2) above shall apply accordingly. The premiums for new business shall not be lower than the premiums for the insured of the same age under the existing portfolio of insurance contracts leaving out of account their old age provision.
(4a) In substitutive medical expenses insurance, at the latest at the beginning of the calendar year following the year of the insured's attaining the age of 21 and ending in the calendar year of the insured person's attaining the age of 60, a loading of 10 per cent of the annual zillmered gross premium shall be charged to the insured, allocated annually and directly to the old-age provision pursuant to section 341 f (3) of the Handelsgesetzbuch, and used for the purpose of premium reduction in old age in accordance with section 12a (2a) below. The first sentence above shall not apply to health insurance involving agreed contract terms covering the insured during periods of training or education, stays abroad, or travels, and to tariffs terminating at the latest upon the insured's attaining the age of 65.
(5) If the non-substitutive health insurance is treated in the same way as life insurance subsections 1 to 4 above shall apply accordingly.
In medical expenses insurance and voluntary nursing care insurance (nursing care medical expenses and nursing care daily benefit insurance) operated in accordance with the technical principles of life insurance, the insurance undertaking shall directly credit annually to the insured investment income attributable to the sum of the respective positive old-age provision of the insurances concerned available at the end of the preceding financial year. The amount credited shall be 90 per cent of the average yield exceeding the yield obtained by applying the technical interest rate (excess yield from interest payments).
(2) The full share of the amount determined in accordance with subsection 1 above which is attributable to the share of the old-age provision that has been accumulated from the loading shall be credited annually to the insured who paid the loading under section 12 (4a) above, until the end of the financial year of their attaining the age of 65. Of the remaining amount, 50 per cent shall be credited directly to the old-age provision of all insured persons. The percentage rate referred to in the second sentence above shall increase annually by two per cent, from the financial year of the insurance undertaking beginning in 2001, until it attains 100 per cent.
(2a) The amounts referred to in subsection 2 above shall be used, from the moment the insured attains the age of 65, to fund, for an unlimited period, the additional premiums arising from premium increases, or a portion of the additional premiums, insofar as the available funds are not sufficient to fund the additional premiums fully. Amounts which have not been used up shall be used for a premium reduction from the moment the insured attains the age of 80. Any subsequent allocations shall be used for an immediate premium reduction. In voluntary nursing care daily benefit insurance the insurance policy conditions may provide for increased benefits instead of a premium reduction.
(3) The share of the investment income determined in accordance with subsection 1 above which remains after deduction of the amounts used in accordance with subsection 2 above shall be set aside in favour of the insured who, by the balance sheet date, have attained the age of 65 for a profit-unrelated premium refund and be used within a period of three years to avoid or limit premium increases, or to reduce premiums. In derogation of the first sentence above, 25 per cent may be used, until the balance-sheet date following January 1, 2010, also for insured persons who have attained the age of 55 but not yet the age of 65. The premium reduction as per the first sentence above may be limited to prevent that the premium of the insured will fall below the initial premium paid at the age at entry; the portion of the amount credited which has not been used up shall be credited additionally in accordance with subsection 2 above.
(1) As regards health insurance treated in the same way as life insurance premium adjustments in compliance with a premium adjustment clause shall not be made unless an independent trustee has approved of the adjustment. The trustee shall verify whether the premium has been calculated in accordance with the existing legal requirements. For this purpose, he shall be made available all technical calculation bases required to verify the premium adjustments including the necessary supporting documents and data. The technical calculation bases shall comprise all the principles for the calculation of the premiums and old age provision including the calculation bases and mathematical formulas used. Approval shall be granted if the requirements of the second sentence have been met.
(1a) The following shall be subject to the approval of the trustee:
1. The date and the amount of the withdrawal and the use of funds from the provision for profit-unrelated premium refunds to the extent that they are to be used in accordance with section 12 a (3);
2. The use of the funds from the provision for profit-related refunds.
Where the first sentence, nos. 1 and 2, above applies, the trustee shall see to it that the conditions provided in the articles of association and the insurance policy conditions are met and that the interests of the insured are sufficiently safeguarded. In respect of the use of funds to limit premium increases, he shall in particular see to an appropriate distribution on the groups of the insured who paid the loading to the premium under section 12 (4a) and those who did not, and he shall sufficiently take into account the aspect of reasonableness of the premium increases in per cent and in absolute figures for the older insured
(2) The insurance undertaking shall for every rate calculated in the same way as in life insurance compare at least annually the required insurance benefits with the calculated insurance benefits. If the comparison to be submitted to the supervisory authority and the trustee shows a deviation of more than 10 per cent for a certain rate, provided the general insurance policy conditions do not require a lower percentage, the undertaking shall examine all premiums under this rate and, if the deviation may be considered not to be only temporary, adjust them with the approval of the trustee. There shall be no adjustment if the insurance benefits were insufficient when they were calculated for the first time, or recalculated, and a prudent and conscientious actuary should have recognised this. In this connection the fixed amount of any retention may also be adjusted and any agreed premium loading changed accordingly if this has been stipulated in the contract. If in the opinion of the trustee premium increases or reductions are necessary for a rate wholly or partly and if no agreement can be reached with the undertaking the trustee shall inform the supervisory authority without delay.
(3) Only persons shall be appointed trustee who are of good repute and professionally qualified and not linked with the insurance undertaking and who in particular do not have concluded with the insurance undertaking or any associated undertaking an employment contract or other service contract. To meet the qualification requirement the trustee shall dispose of adequate knowledge in the field of premium calculation in health insurance.
(4) Before appointing the designated trustee the supervisory authority shall be informed and provided with the necessary information to judge the requirements in accordance with subsection 3 above. If there is evidence of the designated trustee not meeting the good- repute or professional qualification requirement, the supervisory authority may require that another person be appointed. If after the appointment there should be evidence of certain circumstances which would have prevented his being appointed in accordance with subsection 3 above or if the trustee does not properly fulfil his duties set out in this law, in particular if he approves of any premium adjustment which does not comply with the legal requirements, the supervisory authority may require that another trustee be appointed. If in the cases mentioned in the second and third sentences also the designated or the freshly appointed trustee does not meet the requirements or if no fresh appointment is made, the supervisory authority itself may appoint a trustee.
(1) The Federal Finance Ministry shall have the power to lay down by ordinance for health insurance treated in the same way as life insurance
1. the actuarial methods for the calculation of the premiums including premium adjustments and the mathematical provisions mainly the old age provision taking into account in particular the relevant assumptions with regard to the invalidity and sickness risk, mortality, dependence of the risk on age and sex, and probability of cancellation as well as the amount of the safety loading and interest rate and the principles for the assessment of the other loadings,
2. more detailed provisions with regard to the similarity of the insurance coverage and allowance for the acquired rights and old age provision entitlements in case of change to a different rate in accordance with section 12 (1) (4) above,
3. provisions on how to determine the excess yield from interest payments in accordance with section 12a (1) above, how to distribute the amounts among the entitled insured in accordance with section 12a (2) and (3) above, and how to determine the initial premium at the age at entry,
4. the procedure to compare the required insurance benefits with the calculated insurance benefits in accordance with section 12b (2) above, first and second sentences, and the period available for submitting this comparison to the supervisory authority and the trustee.
This power may be transferred by ordinance to the BAV which shall stipulate regulations in consultation with the supervisory authorities of the states (Länder).
(2) Ordinances in accordance with subsection 1, first sentence, paragraph 1 above shall be issued in agreement with the Federal Ministry of Justice. This shall also apply to ordinances in accordance with subsection 1 above, second sentence, if they serve to transfer the power to issue ordinances in accordance with subsection 1, first sentence, paragraph 1 above.
(1) If with regard to health insurance treated in the same way as life insurance the premiums for insurance contracts concluded before 29th July, 1994, may be adjusted under an adjustment clause with the approval of the supervisory authority, such approval by the supervisory authority shall be replaced by the consent of the trustee (section 12b (1) and (2) above).
(2) If the insurance undertaking does not appoint for health insurance treated in the same way as life insurance a trustee who meets the requirements under section 12b (3) above, the supervisory authority may assume the duties of the trustee at the expense of the insurance undertaking. The first sentence shall no longer be applicable if a sufficient number of trustees who meet the requirements under section 12b (3) above offer their services within the country. The Federal Finance Minister shall have the power to determine by way of an ordinance not requiring approval by the Bundesrat when the requirements of the second sentence shall be deemed to have been met.
(1)As regards insurance contracts concluded before January 1, 2000, section 12 (4a) shall apply subject to the requirement that
1. the loading shall be charged for the first time on the 1st of January of the calendar year which follows the 1st of January 2000;
2. in the first year, the loading shall be two per cent of the gross premium and increase on each 1st of January of the following years by two per cent to an amount not exceeding 10 per cent of the gross premium, unless it is dropped because of the insured's attaining the age of 60;
3. the insurance undertaking is obliged of inform the policyholder in good time before the loading is charged for the first time of its amount and the annual increases;
4. the loading shall only be charged if the policyholder does not object in writing within three months after receipt of the information as per no. 3 above.
(1) Any change in the operating plan shall not become effective until it has been approved by the supervisory authority. The first sentence shall not apply to amendments to the articles of association whose purpose it is to increase capital. Section 8 above shall apply accordingly.
(1a) Subsection 1 above shall not apply to outsourcing contracts (section 5 (3) (4) above). Any such contracts concluded with insurance undertakings subject to supervision under this law shall not become effective until they have been submitted to the supervisory authority. Any such contracts concluded with other undertakings shall not become effective until three months have elapsed from their deposit with the supervisory authority provided the latter did not object on the grounds mentioned in section 8 (1) above. The supervisory authority shall be authorised to extend this period to six months where this is justified by circumstances. This period of time shall end earlier as soon as the supervisory authority finds that the contracts are unobjectionable. The second to fifth sentences shall not apply if only the remuneration has been changed. Changes of remuneration in contracts with affiliated undertakings (section 15 of the Aktiengesetz) and undertakings treated like them in accordance with section 53d (3) below shall not become effective until the amended contract has been deposited with the supervisory authority. Section 53d below shall not be affected.
(2) If business operations are to be extended to other classes of insurance supporting documents shall be submitted in accordance with section 5 (3) to (5) above. In addition, the undertaking shall prove that it disposes of own funds in the amount of the solvency margin (section 53c (1) below, first sentence) or the minimum guarantee fund prescribed for the new activity if the latter is greater.
(3) If business operations are to be extended to an area not located in the EC Member States and other EEA Member States proof shall be given that also after the intended extension of its business operations the undertaking will meet the financial resources requirements of the EC Member States and the other EEA Member States and that if it establishes a branch in an area not located in the EC Member States and the other EEA Member States the undertaking has been granted the authorisation to carry on business required there; in addition, it shall specify which classes and types of insurance it intends to operate.
(1) The insurance undertaking shall be permitted to operate direct insurance business on an establishment or services basis in the other EC Member States and the other EEA Member States according to sections 13b and 13c below. A branch shall also be deemed to exist if insurance business is operated through an independent person though permanently in charge of such business from a facility in such other EC or EEA Member State. The first and second sentences shall not apply to pension and death benefit funds; section 13 (3) above shall apply to them subject to the requirement that it shall be applicable to any activity carried out abroad.
(2) Provision of services within the meaning of this law shall mean that the insurance undertaking whose head office is in an EC or EEA Member State covers from its head office or its branch in an EC or EEA Member State by way of direct insurance risks located in another EC or EEA Member State without the undertaking making use there of a branch. An EC or EEA Member State in which the risk is located shall mean
1. as regards the insurance of risks with respect to immovables in particular buildings and plants and equipment installed there covered by the same contract, the EC or EEA Member State where these are located,
2. as regards the insurance of risks with respect to vehicles of any kind to be entered into an official or officially recognised register and provided with a distinguishing number in an EC or EEA Member State, such EC or EEA Member State,
3. as regards the insurance of travel and holiday risks in insurance contracts of a maximum term of four months, the EC or EEA Member State in which the applicant performed the legal acts required for the conclusion of the contract,
4. in all the other cases,
a) if the policyholder is a natural person, the EC or EEA Member State in which he has his habitual residence,
b) if the policyholder is not a natural person, the EC or EEA Member State in which the undertaking, facility or relevant installation is located to which the contract refers.
(1) The insurance undertaking shall notify to the supervisory authority the intended establishment of a branch and mention the relevant EC or EEA Member State. This notification shall include:-
1. the information and estimations under section 5 (3) (2), subsection 4, third and fourth sentences, and subsection 5 (3) and (4) above; if health insurance is to be written within the meaning of article 54 (2) of the Council directive 92/49/EEC of 18th June, 1992, on the coordination of laws, regulations and administrative provisions for direct insurance (other than life insurance) and amendment of directives 73/239/EEC and 88/357/EEC (third non-life directive) (OJ of the EC No. L 228, p. 1), additionally the information in accordance with section 5 (5) (1a) above,
2. information about the organisational structure,
3. the name of the designated authorised agent who shall possess sufficient powers to bind the undertaking in relation to third parties and to represent it in relations with the authorities and courts of the other EC or EEA Member State,
4. the prospective address which shall also be the business address of the authorised agent,
5. if the risks mentioned in part A (10) (a) of the annex are to be covered through the branch, a statement to the effect that the undertaking has become member of the national indemnity fund for the victims of road accidents caused by uninsured or unidentified motor vehicles and of the national bureau in the other EC or EEA Member State.
(2) The supervisory authority shall examine for the purpose of the above within a period of three months of receipt of the documents mentioned under subsection 1 above, second sentence, in addition to the lawfulness, the adequacy of the administrative structures and the financial situation of the undertaking and if the authorised agent and responsible managers or directors of the branch meet the requirements of section 7a (1) above. If no objection can be made it shall send, before the above period has expired, to the supervisory authority of the other EC or EEA Member State
1. these documents, and
2. a certificate to the effect that the undertaking disposes of own funds in the amount of the solvency margin or of the minimum guarantee fund required for the classes of insurance operated, whichever is the greater, and inform the undertaking accordingly. In the contrary case it shall inform the undertaking before the above period has expired that approval for the establishment of a branch will not be granted and give the grounds for not granting it.
(3) In the case of subsection 2 above, second sentence, the branch may be established and take up its activities if two months have elapsed since the undertaking received the notification unless the supervisory authority of the other EC or EEA Member State has specified an earlier date.
(4) The insurance undertaking shall notify to the supervisory authority any changes in the information provided in accordance with subsection 1, second sentence, paragraphs 1 to 4 above not later than one month before it is intended to put such changes into effect. Otherwise, subsection 2 above shall apply accordingly.
(1) The insurance undertaking shall notify to the supervisory authority that it intends to carry on business under the freedom of services provision mentioning the relevant EC or EEA Member State. It shall also state which classes of insurance it intends to operate and which risks of an insurance class it intends to cover there; if health insurance is to be written within the meaning of article 54 (2) of the third non-life directive the information in accordance with section 5 (5) (1a) above shall additionally be provided. As regards the coverage of risks pursuant to part A (10) (a) of the annex the notification shall to the extent that this is required in compliance with the laws of the other EC or EEA Member State also include:-
1. a declaration in accordance with section 13b (1), first sentence, paragraph 5 above,
2. the name and business address of a representative (representative for the settlement of losses) residing or established in the other EC or EEA Member State to whom section 7a (1) above, first sentence, shall apply accordingly and who
a) collects all the necessary information about losses and disposes of the necessary furniture and fixtures for this purpose,
b) disposes of adequate powers to represent the undertaking with respect to persons making claims in and out of court in particular vis-à-vis administrative authorities and to confer any relevant authority,
c) until final settlement of the claim disposes of adequate powers to pay the amounts due in respect of such claims, and
d) has the power to represent the undertaking in relations with the authorities of the other EC or EEA Member State as regards the existence and validity of the insurance contracts.
(2) The supervisory authority shall examine within a period of one month of receipt of the documents mentioned in subsection 1 above, second and third sentences, the lawfulness of the intended business. If no objection can be made it shall send before the above period has expired to the supervisory authority of the other EC or EEA Member State
1. these documents,
2. a certificate about the classes of insurance the undertaking shall be permitted to operate and the risks of an insurance class it shall be permitted to cover,
3. a certificate pursuant to section 13b (2), second sentence, paragraph 2 above and inform the undertaking accordingly. In the contrary case it shall inform the undertaking before the above period has expired that approval for operating direct insurance business by way of provision of services will not be granted and give the grounds for not granting it. Approval shall be deemed to have been denied if a notification of the supervisory authority has not been received by the end of the above period of time.
(3) In the case of subsection 2 above, second sentence, the undertaking may take up its activity on receipt of the relevant notification.
(4) Subsections 1 to 3 above shall also apply if the undertaking wishes to operate additional classes of insurance or cover additional risks or appoint another representative for the settlement of claims.
The insurance undertakings shall inform the supervisory authority immediately about
1. the appointment of a manager or director stating all essential facts to judge his good repute and qualification (section 7a (1) above),
2. the resignation of a manager or director,
3. amendments to the articles of association for the purpose of increasing the capital,
4. the acquisition or sale of a qualifying participation in an insurance undertaking, incidents where the participation limits of 20 per cent, 33 per cent and 50 per cent of the voting rights or nominal capital have been reached, exceeded or not been reached as well as the fact that the insurance undertaking will become or no longer is a subsidiary (section 7a (2) above, sixth sentence) of another undertaking as soon as the insurance undertaking has been informed about such changes in the participations,
4a. the existence, modification or abandonment of any other close link pursuant to section 8 (1), fourth sentence,
5. the name and address of the holder of a qualifying participation in an insurance undertaking and the amount of the participation annually as soon as the undertaking has been informed about it,
6. the principles for the calculation of the premiums and mathematical provisions including the calculation bases and mathematical formulas used, which they shall also submit, after having been granted an authorisation to operate life insurance; this shall also apply when new or changed principles are used,
7. the intended use of new or changed general insurance policy conditions, which they shall also submit, with respect to health insurance within the meaning of section 12 (1) above and compulsory insurances,
8. the intended use of new or changed principles within the meaning of section 5 (5) (1a), which they shall also submit, with respect to health insurance within the meaning of section 12 (1) above.
(1) Any contract by which the portfolio of insurance contracts of an undertaking is to be transferred wholly or partly to another undertaking shall be approved by the responsible supervisory authorities of the undertakings in question. The transferee undertaking shall prove that after the transfer it will dispose of own funds in the amount of the solvency margin. Otherwise, section 8 above shall apply accordingly. For the purpose of the portfolio transfer the rights and obligations of the transferor undertaking under the insurance contracts shall also in relation to the policyholders be transferred to the transferee undertaking; section 415 of the Bürgerliches Gesetzbuch (Civil Code) shall not be applicable.
(1a) If a domestic insurance undertaking transfers wholly or partly a portfolio of insurance contracts concluded in accordance with section 13a above on an establishment or services basis to an undertaking which has its head office in an EC Member State or another EEA Member State only the approval of the responsible supervisory authority of the transferor undertaking shall be required in derogation of subsection 1 above, first sentence. The approval shall be granted, provided there is no ground on which to deny it in accordance with subsection 1 above, third sentence, only if
1. it has been proved by a certificate made out by the supervisory authority of the home Member State that after the transfer the transferee undertaking will dispose of own funds in the amount of the solvency margin,
2. the supervisory authorities of the EC or EEA Member States in which the risks of the portfolio of insurance contracts are located have given their approval, and
3. in the case of transfer of the portfolio of insurance contracts of a branch the supervisory authority of the EC or EEA Member State of the branch has been consulted.
The first and second sentences of paragraph 1 above shall also apply to the transfer of a portfolio of insurance contracts concluded within the country. In the cases of the first and third sentences subsection 1 above, fourth sentence shall apply accordingly.
(2) The contract covering a portfolio transfer shall be concluded in writing; section 311 of the Bürgerliches Gesetzbuch shall not be applicable.
(3) Approval of the portfolio transfer shall be published in the Bundesanzeiger (Federal Gazette). If only supervisory authorities of the states (Länder) are concerned publication in the relevant gazettes of the states (Länder) shall be sufficient.
Any transformation of an insurance undertaking in accordance with section 1 of the Umwandlungsgesetz (Law regulating Transformation of Undertakings) shall be subject to approval by the supervisory authority. Section 14 (1), second to fourth sentences, shall apply accordingly. Approval may also be rejected if the transformation requirements have not been met.
A society which intends to insure its members according to the mutuality principle shall acquire legal capacity by receiving from the supervisory authority permission to carry on business as a "mutual society".
The requirements of the first and fourth books of the Handelsgesetzbuch with respect to merchants shall, with the exception of sections 1 to 7 above, apply to mutual societies accordingly unless otherwise provided in this law. As regards accounting the requirements of the second subsection of the fourth section in conjunction with the requirements of the first and second sections of the third book of the Handelsgesetzbuch shall apply accordingly.
(1) The statutory framework of a mutual society shall be laid down in its articles of association unless otherwise provided in this law.
(2) The articles of association shall be certified by a notary.
(1) The articles of association shall lay down the name and head office of the society.
(2) It shall be possible to infer from the name where the society is located. It shall also be stated in the name or in a supplement that insurance is carried on on a mutual basis.
As regards the liabilities of the mutual society its creditors shall only be entitled to the assets of the mutual society. The members shall not be liable for claims of the creditors.
The articles of association shall include provisions about the beginning of membership. A requirement for membership shall be to conclude an insurance contract with the mutual society. Membership shall end on termination of the insurance contract unless otherwise provided in the articles of association
(1) Contributions to be paid by the members and benefits payable to the members shall under similar conditions be determined only on an equality basis.
(2) The mutual society shall not be entitled to carry on insurance business against fixed premiums without the policyholder having to become a member unless this has been expressly permitted by the articles of association.
(1) The articles of association shall provide for the establishment of members funds to cover the cost of the foundation of the mutual society and serve as guarantee and operational funds. The articles of association shall contain the conditions on which the members funds shall be at the disposal of the society and in particular stipulate how they shall be repaid and if and to what extent the persons who made available the funds shall be entitled to participate in the management of the mutual society.
(2) For the purpose of paying in the members funds, only legal tender, checks certified by the Deutsche Bundesbank, payments into a domestic account with the Deutsche Bundesbank or a credit institution or postal giro account of the society or its board of directors, available at its free disposal, shall be permitted. Any claims of the board of directors against these paid-in funds shall be deemed to be claims of the society. The articles of association may permit promissory notes instead of the above payments.
(3) The persons who made available the funds shall not be granted a right to call for repayment. In the articles of association they may be entitled, in addition to interest payments on the annual income, to participation in the profit as shown in the annual balance sheet; it is within the discretion of the supervisory authority to decide on the maximum percentage by which both interests and total payments received may exceed the paid-in cash amount. The members funds may be divided into shares for which share certificates may be issued.
(4) The members funds may be repaid only out of the annual income and only to the extent that the loss reserve under section 37 below has increased; repayment shall begin as soon as the capitalised expenses for starting operations have been fully written off.
(repealed)
(1) The articles of association shall stipulate whether the expenses are to be covered by single or recurring contributions to be paid in advance or by contributions distributing the actually required amount among the members (required contributions).
(2) If the contributions are to be paid in advance the articles of association shall also specify whether a right to collect supplementary contributions is reserved or excluded; if it is to be excluded it shall also be specified whether the benefits may be reduced.
(3) The articles of association may provide maximum amounts for supplementary contributions and required contributions. Any restriction to the effect that payments of supplementary contributions or required contributions may only be invited to cover the claims of the members shall not be permitted
(1) Members who left or joined the mutual society during the financial year shall also be liable to pay supplementary contributions or required contributions. Their obligation to pay contributions shall depend on the length of time they have been members in the financial year.
(2) If the supplementary contribution or the required contribution of a member is determined on the basis of the contribution paid in advance or the sum insured and if the contribution or sum insured has been increased or reduced during the financial year the higher amount shall be taken as a basis for the calculation.
(3) Subsections 1 and 2 above shall apply unless otherwise provided in the articles of association.
A member shall not be entitled to set off the obligation to pay contributions against a claim the member may have against the mutual society.
(1) The articles of association shall specify the conditions under which supplementary contributions or required contributions may be invited, in particular, to what extent other funds (members' funds, reserves) shall be used first.
(2) The articles of association shall also specify how the supplementary contributions or required contributions are to be invited and collected.
(1) The articles of association shall stipulate how notices of the mutual society are to be published.
(2) Notices to be published in the press shall also be included in the Bundesanzeiger (Federal Law Gazette) if the business operations of the mutual society extend beyond a single state (Land); the supervisory authority may, however, grant exemptions. If business operations are limited to a single state (Land) the highest authority of that state may designate another paper instead of the Bundesanzeiger. Other papers shall be designated by the articles of association.
The articles of association shall specify how a board of directors, a supervisory board and supreme representation (supreme body; assembly of members or of representatives of the members) shall be established.
(1) All members of the board of directors and supervisory board shall apply for registration of the mutual society with the court of the district where the society has its head office. The application shall state the power of the individual members of the board of directors to represent the society.
(2) The supervisory authority shall inform the registration court of any authorisation to carry on business granted in accordance with section 15 above.
(1) The application shall be accompanied by
1. the document authorising the society to carry on business;
2. the articles of association;
3. the document relating to the appointment of the board of directors and the supervisory board;
4. the document relating to the establishment of the members funds together with a statement by the board of directors and the supervisory board as to how and to what extent the members funds have been paid in and that the paid-in amount is definitely at the free disposal of the board of directors.
(2) The members of the board of directors shall deposit their signatures with the court.
(3) Originals or certified copies of the documents accompanying the application shall be deposited with the court.
(1) It shall be entered into the commercial register the name and head office of the mutual society, the classes of insurance to be operated, the amount of the members funds, the date on which authorisation to carry on business was granted, and the names of the members of the board of directors. The powers of the members of the board of directors to represent the society shall also be entered.
(2) If the articles of association include any provision with regard to the lifetime of the society this shall also be entered.
The following shall be published together with the contents of the entry:
1. whether the expenses shall be covered by contributions paid in advance or distributed among the members later and if in the case of contributions to be paid in advance a right to collect supplementary contributions is reserved or excluded, whether the obligation to pay contributions is limited and whether insurance benefits may be reduced (section 24 above);
2. the provisions under section 28 above;
3. how the bodies to represent the society shall be appointed and composed;
4. the members (name, status and place of residence) of the first supervisory board;
5. how the supreme representation shall be appointed.
The board of directors shall consist of at least two persons. Section 76 (1) and (3) and sections 77 to 91, 93 and 94 of the Aktiengesetz shall apply to the board of directors accordingly. The provisions contained therein with regard to decisions taken by the general assembly shall apply here to the decisions taken by the supreme representation. Section 93 (3) of the Aktiengesetz shall be replaced by the following provision:-
The members of the board of directors shall in particular be liable to indemnification if in defiance of the law
1. the members' funds are repaid or interest is paid thereon,
2. the assets of the mutual society are distributed,
3. payments are made after the society has become insolvent or any debt overload has become apparent; this shall not apply to payments which also thereafter are consistent with the care and diligence of a manager or director,
4. credit is granted.
(1) The supervisory board shall consist of three members. The articles of association may specify a higher number. It shall be possible to divide this number by three. The maximum number of board members shall be twenty-one.
(2) The supervisory board of mutual societies to which section 76 of the Betriebsver-fassungsgesetz applies in accordance with section 77 (2) of the Betriebsverfassungsgesetz (Works Constitution Law) shall be composed of members elected by the supreme representation of the society and members representing the employees; as regards other societies it shall be composed only of members elected by the supreme representation.
(3) Section 30 (2) and (3), first sentence and first half of the second sentence, section 96 (2), sections 97 to 100, section 101 (1) and (3), sections 102, 103 (1), (3) to (5) and sections 104 to 116 of the Aktiengesetz shall apply to the supervisory board accordingly. The duties assigned there to the shareholders meeting shall in this case be performed by the supreme representation. Every member of the supreme representation shall have the right to file motions in accordance with section 98 (2) (3) and section 104 (1), first sentence, of the Aktiengesetz. Section 113 (3) of the Aktiengesetz shall be replaced by the following provisions which shall apply in addition to section 116 of the Aktiengesetz:-
1. If the members of the supervisory board are entitled to profit participations these shall be calculated on the basis of the annual surplus less accumulated losses brought forward and transfers to earnings reserves; the shares in the surplus to which pursuant to section 22 (3) above the persons are entitled who made available the members funds shall be deducted. Any provisions to the contrary shall be void.
2. The members of the supervisory board shall in particular be liable to indemnification if any of the acts under section 34 above, fourth sentence, are performed with their knowledge and without their taking any actions.
Section 117 of the Aktiengesetz shall apply accordingly.
The provisions of sections 118, 119 (1) (1) to (3), (5), (7) and (8) and subsection 2, sections 120, 121 (1) to (3) and (4), first sentence, sections 122, 123 (1), sections 124 to 127, 129 (1) and (4), sections 130 to 133, 134 (4) and sections 136, 142 to 147, 241 to 253 and 257 to 261 of the Aktiengesetz applicable to the shareholders meeting shall apply to the supreme representation accordingly. Section 256 of the Aktiengesetz shall apply accordingly. If the supreme representation is the general assembly of members, section 134 (3) of the Aktiengesetz shall also apply accordingly. Subordinated loans (section 53c (3a) below) shall not be granted unless the supreme representation has taken a relevant decision. A majority of three quarters of the votes cast shall be required to take a decision. A different majority and additional requirements may be stipulated in the articles of association.
(repealed)
If the provisions of the Aktiengesetz, which in accordance with sections 34, 35a and 36 above shall apply accordingly, grant rights to a minority of shareholders (section 93 (4), third sentence, section 117 (4), section 120 (1), sections 122, 142 (2) and (4), sections 147, 258 (2), third sentence, section 260 (1), first sentence, and subsection 3, fourth sentence, of the Aktiengesetz) the articles of association shall specify the required minority of the members of the supreme representation.
The articles of association shall stipulate that a reserve to cover extraordinary operational losses (loss reserve, reserve fund) shall be established, the annual amounts to be reserved, and the minimum amount of the reserve.
(1) Any surplus shown in the balance sheet shall be distributed among the members specified in the articles of association unless such surplus shall be allocated to the loss reserve or any other reserve or used for the payment of remunerations or carried forward to the next financial year in accordance with the articles of association. Section 53c (3a) below of this law and section 269 of the Handelsgesetzbuch shall not be affected.
(2) The articles of association shall stipulate the rules for any such distribution and whether the surplus shall be distributed only among the members existing at the end of the financial year or also among the members who left the mutual society.
(1) Only the supreme representation shall be entitled to amend the articles of association.
(2) It shall be entitled to delegate the power to make amendments which only affect the form to the supervisory board.
(3) It may authorise the supervisory board in case the supervisory authority requires any changes to be made before it approves of an amendment decision to make such changes.
(4) For the purpose of a decision of the supreme representation to abandon a class of insurance or to introduce a new one a majority of three quarters of the votes cast shall be required; the articles of association may, however, stipulate otherwise. As regards other decisions in accordance with subsections 1 to 3 above any such majority shall not be required unless otherwise specified in the articles of association.
(1) An application for registration in the commercial register shall be filed for any amendment to the articles of association. The application shall be accompanied by the certificate of approval. The complete text of the articles of association shall also be submitted and provided with a certification by a notary to the effect that the amended provisions of the articles of association comply with the decision to amend the articles of association and that the unattended provisions comply with the latest version of the articles of association submitted for the purpose of registration in the commercial register.
(2) On registration reference may be made to the documents submitted to the court and relating to the amendment unless the amendment concerns information in accordance with section 32 above. Any provisions shall be published to which the publications prescribed under section 33 above relate.
(3) The amendment shall not become effective unless it has been entered in the commercial register with the competent court of the district where the mutual society has its head office.
(1) Section 39 (1) and (2) above shall, subject to subsection 2 below, apply to amendments to the general insurance policy conditions under section 10 above accordingly.
(2) The articles of association may authorise the board of directors to introduce or amend general insurance policy conditions with the approval of the supervisory board. If neither the board of directors nor the supervisory board are authorised by the articles of association to amend the general insurance policy conditions, the supreme representation may authorise the supervisory board to make preliminary amendments to the general insurance policy conditions if there is an urgent need; the amendments shall be submitted to the supreme representation at its next meeting and repealed if so required.
(3) Any amendment to the articles of association or the general insurance policy conditions shall not affect any existing insurance contract unless the insured explicitly approves of any such amendment. This shall not apply to provisions where it has been expressly stipulated in the articles of association that any amendment thereto may also have effect on the existing contracts.
The mutual society shall be dissolved:-
1. after expiry of the period of time specified in the articles of association;
2. on decision taken by the supreme representation;
3. by instituting insolvency proceedings against the assets of the mutual society;
4. from the date the order becomes final by which the institution of insolvency proceedings is rejected due to the bankrupt's assets being inadequate to cover the expenses of the proceedings.
(1) The decision of the supreme representation to dissolve the society (section 42 (2) above) shall be taken by a majority of three quarters of the votes cast unless otherwise provided in the articles of association. Members of the supreme representation who voted against the dissolution may have their objection to the dissolution recorded.
(2) The decision shall be approved by the supervisory authority which shall inform the registration court of its approval.
(3) If the mutual society has been dissolved by a decision of the supreme representation the insurance contracts concluded between the members and the society shall be terminated on the date specified in the decision, at the earliest, however, after expiration of a period of four weeks. Any claims which have accrued by that date may be asserted; on the other hand, as regards any contributions paid in advance for future periods of insurance these may be reclaimed only after deduction of the accrued expenses. These provisions shall not apply to life insurance contracts; they shall not be affected unless otherwise provided in the articles of association.
Contracts for the purpose of transferring the portfolio of a mutual society wholly or partly to another company shall be subject to approval by the supreme representation to become effective. Any such decision shall require a majority of three quarters of the votes cast if not otherwise provided in the articles of association.
(repealed)
The board of directors shall apply for registration of the dissolution of the mutual society in the commercial register. This shall not apply if insolvency proceedings have been instituted or their institution has been rejected. In these cases (section 42 (3) and (4) above) the court shall register the dissolution of the society and the grounds thereof in its official capacity; the office of the insolvency court shall send to the registration court a certified copy of the order to institute insolvency proceedings or a certified copy of the order to reject the institution of insolvency proceedings certifying the date the order has become final.
(1) After dissolution the mutual society shall be wound up unless insolvency proceedings have been instituted against the assets of the mutual society.
(2) During winding up the same provisions shall apply as before winding up unless otherwise provided in the following provisions or implied from the purpose of the winding up. In particular supplementary contributions or required contributions (sections 24 to 27 above) may be invited and collected. New insurances may no longer be written, the existing insurances may not be increased or renewed.
(1) Winding up shall be performed by the members of the board of directors as liquidators unless other persons have been designated by the articles of association or a decision of the supreme representation. Also a legal person may be liquidator.
(2) The registration court shall, if there are any important reasons for this, appoint and dismiss liquidators at the request of the supervisory board or a minority of the members to be specified in the articles of association. Section 146 of the Reichsgesetz über die Angelegenheiten der freiwilligen Gerichtsbarkeit (Reich Law on Matters of Non-contentious Jurisdiction) shall apply accordingly. Any liquidators who have not been appointed by the court may be dismissed by the supreme representation at any time. As regards claims arising from the employment contract the general rules shall be applicable.
(3) Otherwise, section 265 (4), sections 266 to 269, section 270 (1) and (2), first sentence, sections 272, 273 of the Aktiengesetz shall apply in the case of winding-up accordingly. Notwithstanding section 270 (2), third sentence, and (3) of the Aktiengesetz to be applied accordingly, the provisions applicable to the establishment and auditing of the annual accounts and annual report of the mutual society and sections 175, 176 of the Aktiengesetz and sections 325, 328 of the Handelsgesetzbuch shall apply accordingly to the opening balance sheet, the explanatory report, the annual accounts and annual report.
(1) The members funds may not be repaid unless the claims of all the other creditors, in particular the claims of the members under insurance contracts have been met or security has been furnished. No supplementary contributions or required contributions shall be allowed for repayment purposes.
(2) The assets of the mutual society remaining after the obligations have been met shall be distributed among the members existing at the time of dissolution using the same criteria as for profit distribution.
(3) The articles of association may stipulate otherwise with regard to the distribution of the assets. They may authorise the supreme representation to designate other eligible recipients.
(1) If a mutual society has been dissolved due to expiration of time or a decision taken by the supreme representation, the supreme representation may elect to continue operation of the society unless distribution of the assets among those eligible has not yet been started. The decision shall require a majority of three quarters of the votes cast unless otherwise provided in the articles of association. It shall be approved by the supervisory authority which shall inform the registration court of its approval.
(2) The same shall apply if the mutual society has been dissolved following the institution of insolvency proceedings, but if the proceedings have been discontinued at the request of the mutual society, or set aside after an insolvency plan providing the continued operation of the mutual society has been confirmed.
(3) The liquidators shall file an application for registration of the continuation of the society's operations in the commercial register; on filing the application they shall prove that distribution of the assets of the society among those eligible has not yet been started.
(4) The decision to continue operations shall not become effective unless it has been entered in the commercial register of the place where the mutual society has its head office.
(1) If existing or former members are required to pay contributions under the law or articles of association (sections 24 to 26 above) they shall if insolvency proceedings are instituted be liable for the society's debts.
(2) Members who left the society in the year before or after the petition to institute insolvency proceedings was filed shall be liable for the society's debts as if they were still members.
(1) Any claims for repayment of the members funds shall rank after all the other debts in insolvency. Among these any claims under insurance contracts to which members who were members at the time the insolvency proceedings were instituted or who had left the society in the year preceding of following the petition for the institution of insolvency proceedings are entitled shall rank after the claims of any other creditors.
(2) No supplementary contributions or required contributions may be allowed for the purpose of repayment of the members funds.
(1) Any supplementary contributions or required contributions needed for the insolvency proceedings shall be fixed and invited by the receiver. He shall calculate immediately after the balance sheet has been filed with the court (section 153 of the Insolvenzordnung (Insolvency Law)) the amounts to be advanced by the members in accordance with their contributory obligations to cover the deficit shown in the balance sheet. As regards the calculation of any such advance payments and additional payments section 106 (1), second sentence, sub-sections (2) and (3), as well as sections 107 to 113 of the Genossenschaftsgesetz (Cooperative Societies Law) shall apply accordingly.
(2) Soon after final distribution has been started (section 196 of the Insolvenzordnung) the receiver shall calculate the final contributions to be paid by the members. As regards this calculation and any further procedure, section 114 (2) and sections 115 to 118 of the Genossenschaftsgesetz shall apply accordingly.
(1) As regards mutual societies with limited operation as to type of business, territory or group of persons (kleinere Vereine) only sections 15, 16 above, second sentence, section 17 (1) above, section 18 (1) above, sections 19, 20, 21 (1) above, sections 22 to 27, 28 (1) above, sections 37, 38 (1) and (2) above, section 39 (1) to (3) above and sections 41 to 44, 48 and 50 to 52 above under part III shall apply. Insurance contracts for fixed premiums may not be written unless the policyholders become members.
(2) Except as otherwise provided in subsection 1 above, "kleinere Vereine" are subject to the general provisions concerning societies of sections 24 to 53 of the Bürgerliches Gesetzbuch. However, in the cases of sections 29 and 37 (2) of the Bürgerliches Gesetzbuch the Local Court will be replaced by the supervisory authority.
(3) If the articles of association provide for a supervisory board, section 34 (1) and (2), first sentence, and (6), section 36 (2) and (3) and sections 37 to 40 of the Genossenschaftsgesetz shall apply accordingly.
(4) The supervisory authority shall decide whether a society is a "kleinerer Verein".
(repealed)
The supervisory authority may permit that kleinere Vereine intending to operate life insurance need not establish members funds if security is otherwise provided by the particular nature of the business or by special arrangements. It may permit on the same grounds that a loss reserve need not be established.
(1) To ensure that their liabilities under the insurance contracts can permanently be met the insurance undertakings shall be obliged to establish free uncommitted own funds in an amount not less than the solvency margin which depends on the total volume of business. One third of the solvency margin shall be deemed to be the guarantee fund.
(2) For the purpose of implementing EC Council insurance directives the Federal Finance Minister shall have the power to lay down by way of ordinances provisions on
1. the calculation and amount of the solvency margin,
2. the minimum guarantee fund for the individual classes of insurance,
3. the calculation of own funds not shown in the balance sheet of life insurance undertakings and to what extent they may be taken into account for solvency and guarantee fund purposes.
(2a) As regards undertakings writing life insurance in the form of pension and death benefit funds, subsection 2 above securing an adequate solvency shall apply accordingly. Undertakings which have been authorised by 28th July, 1994, and which do not meet the requirements of the ordinance under subsection 2 above, first sentence, shall meet the solvency requirements not later than by the end of the financial year following 31st December, 1998.
(3) Own funds for the purpose of subsection 1 above shall comprise in particular,
1.
a) as regards public limited companies the share capital less the amount of their own shares and less half of the amount not paid up;
b) as regards mutual societies the members funds less the amount not paid up; if at least 25 percent of the members funds have been paid up only half of the amount not paid up shall be deducted;
c) as regards insurance undertakings under public law the items corresponding to the share capital of public limited companies less the amount not paid; if at least 25 percent have been paid up only half of the amount not paid up shall be deducted;
2. the capital reserves and the revenue reserve;
3. the profit carried forward;
3a. the capital paid up in exchange for the granting of subordinated loans according to subsections3a and 3c below;
3b. the capital paid up due to the incurring of subordinated liabilities according to subsections 3b and 3c below;
4. upon request and with the approval of the supervisory authority hidden reserves resulting from the valuation of the assets, in so far as the hidden reserves in question are not of an exceptional nature;
5. as regards mutual societies and public mutual insurance undertakings, provided they do not operate life insurance, half of the supplementary contributions permissible in a financial year in accordance with the articles of association in so far as they do not exceed half of the total own funds;
6. as regards life insurance undertakings
a) the provision for premium refunds if it may be used to cover losses and to the extent that it does not represent any predetermined bonuses,
b) on request, in accordance with the provisions under subsection 2 above and with the approval of the supervisory authority the value of future surplus and the value of acquisition costs included in the premium to the extent that these have not been taken into account for the mathematical provision.
The total of the amounts as specified in sentence 1, paragraphs 1 to 6, shall be reduced by the loss carried forward and the intangible assets shown in the balance sheet, in particular
1. the capitalised start-up and expansion costs (section 269 of the Handelsgesetzbuch),
2. the capitalised goodwill (section 255 (4) of the Handelsgesetzbuch).
(3a) Capital paid up in exchange for the granting of subordinated loans (subsection 3, first sentence, paragraph 3a above) shall not be included in the own funds under section 1 above unless
1. it is fully applicable to cover losses and the insurance undertaking is obliged in case of loss to defer interest payments,
2. it has been agreed that in the case of the institution of insolvency proceedings or the liquidation of the insurance undertaking it shall not be repaid until all non-subordinated creditors have been satisfied,
3. it has been made available to the insurance undertaking for a period of at least five years and must not be repaid prematurely at the request of the creditor; this five-year period need not be observed in the case of early cancellation of subordinated loans due to changed taxation which would result in additional payments to the holder of subordinated loans and if, before being repaid, the capital has been replaced by other, at least equivalent own funds,
4. the claim for repayment falls due within a period of not less than two years or may fall due within that period under the terms of the contract, and
5. the insurance undertaking has explicitly referred to the legal consequences in the second and third sentences, in writing, when the contract was concluded.
Any subsequent change to the requirement to cover the losses, subsequent limitation of the subordination requirement and subsequent reduction of the above periods of time with respect to maturity and cancellation shall not be permitted. Any early repayment shall be refunded to the insurance undertaking irrespective of any agreement to the contrary, unless the capital has been replaced by the deposit of other at least equivalent own funds. If securities are issued for the subordinated loans reference shall be made to the legal consequences in sentences 2 and 3 in the terms of issue and subscription. The insurance undertaking shall not acquire securities representing its own subordinated loans. The obligation to repay shall not be an obligation within the meaning of subsection 1 above, first sentence.
(3b) Capital which has been paid up due to the incurring of subordinated liabilities (subsection 3, first sentence, paragraph 3b above) shall not be included in the own funds under subsection 1 above unless
1. it is repaid after all non-subordinated creditors have been satisfied in the case of the institution of insolvency proceedings or the liquidation of the insurance in accordance withtaking,
2. it has been made available to the insurance undertaking for a period of at least five years and must not be repaid prematurely at the request of the creditor; this five-year period need not be observed in the case of early cancellation of bonds due to changed taxation which would result in additional payments to the holder of the bonds and if, before being repaid, the capital has been replaced by other, at least equivalent own funds,
3. setting off the repayment claim against claims of the insurance undertakings is excluded and as regards the liabilities no contractual securities are provided by the insurance undertaking or any third parties, and
4. the claim for repayment falls due within a period of not less than two years or may fall due within that period under the terms of the contract.
Any subsequent limitation of the subordination requirement and subsequent reduction of the above periods of time with respect to maturity and cancellation shall not be permitted. Any early repayment shall be refunded to the insurance undertaking irrespective of any agreement to the contrary, unless the insurance undertaking has been wound up or the capital has been replaced by other at least equivalent own funds. On conclusion of the contract the insurance undertaking shall expressly draw attention to the legal consequences in sentences 2 and 3 in writing; if securities are issued for the subordinated liabilities reference shall be made to the legal consequences only in the terms of issue and subscription. The insurance undertaking shall not acquire securities representing its own subordinated liabilities. The obligation to repay shall not be a commitment within the meaning of subsection 1 above, first sentence.
(3c) The total amount of the subordinated loan capital under subsection 3a above and of the subordinated liabilities under subsection 3b above shall be included in the own funds under subsection 1 above only if it does not exceed 25 per cent of the paid-up own funds under subsection 3, sentence 3, paragraphs 1 to 3 above; the supervisory authority may permit a higher percentage which, however, shall not exceed 50 per cent of the solvency margin if the payment of subordinated loan capital or the incurring of subordinated liabilities serve to meet the requirements of a solvency or financial scheme (section 81b below).
(4) The calculation of the solvency margin and a statement of the undertaking's own funds shall be submitted to the supervisory authority annually, together with the annual accounts and status report required by section 341a, subsection 1 of the Handelsgesetzbuch.
(1) If an insurance undertaking makes use of the services of an affiliated undertaking (section 15 of the Aktiengesetz) which is not an insurance undertaking under a contract for work and services, a tenancy and lease agreement and contracts of a similar nature, remuneration shall be limited to the amount which a manager or director who meets the fit and proper requirement would also negotiate with a non-affiliated undertaking taking into account the interests of the insured. The insurance undertaking shall be informed annually about the expenses under these contracts and the way in which these expenses have been calculated. (2) Contracts under subsection 1 above shall be concluded in writing. (3) Subsections 1 and 2 above shall apply to contracts with non-affiliated companies accordingly if a majority interest is held, either directly or indirectly, by the same person or persons in both parties to the contract (section 16 of the Aktiengesetz).
(1) The assets of the Deckungsstock (section 66 below) and the other restricted assets of an insurance undertaking shall, taking into account the type of insurance business carried on and the structure of the undertaking, be invested in a way which ensures maximum security and profitability, while maintaining its liquidity at all times, through adequate diversification and spread.
(2) The supervisory authority shall notwithstanding the provision under section 54d below be informed of
a) the acquisition of real property and equivalent rights;
b) the acquisition of interests in other undertakings, however, if these