Questions & answers on insurance guarantee schemes

What insurance guarantee schemes are there in Germany?

Since the end of 2004, there are statutory guarantee schemes for the fields of life insurance and substitutive health insurance (sections 124 et seq. of the Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG)). The guarantee funds are supervised by BaFin. The Federal Ministry of Finance has delegated the duties and powers associated with the guarantee funds to private-law legal entities by way of statutory order.

Protektor Lebensversicherungs-AG, the company originally established as a voluntary rescue pool, was additionally assigned the duties and powers of the statutory guarantee fund for life insurance. Further information on Protektor Lebensversicherungs-AG is available at

Its address is:

Protektor Lebensversicherungs-AG
Wilhelmstraße 43 G
10117 Berlin

Phone: + 49 (0) 30 2200258-0
Fax: + 49 (0) 30 2200258-22

customer service:
Phone: +49 (0) 621 49493-0
Fax: +49 (0) 621 49493-2420

Medicator AG, formerly a voluntary rescue pool, was additionally assigned the duties and powers of the statutory guarantee fund for health insurance.

You can reach it under:

Medicator AG
Gustav-Heinemann-Ufer 74c
50968 Köln

Phone: +49 (0) 221/9987-0
Fax: +49 (0) 221/9987-3952

Which companies are mandatory members of the guarantee funds?

Those companies which are required to be members of these two guarantee funds are insurance companies having their registered office in Germany which are authorised to carry on life insurance business or substitutive health insurance.

Pension and death benefit funds are exempted from this requirement. However, pension funds may voluntarily join the guarantee fund for life insurers.

Mandatory members of the guarantee funds also include the German establishments of life and health insurers having their registered office in a third country, i.e. outside the European Union (EU) or the European Economic Area (EEA). By contrast, German establishments of insurers from other EU or EEA countries are not members of the German guarantee funds.

The guarantee provided under the funds thus covers all contracts entered into by (mandatory) member companies based in Germany, even if the contracts were not concluded in Germany but in another Member State of the EEA.

What insurance contracts are protected by the statutory guarantee funds?

Pursuant to section 124 (1) of the Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG), the statutory guarantee fund for life insurance protects all insurance contracts of insurance classes 19 to 23. The scope of guarantee thus notably covers the particularly common endowment policies for death or maturity, term life insurance, private pension insurance and unit-linked life insurance. Also protected are what are referred to as capital redemption operations offered by life insurance companies. Capital redemption operations are interest-bearing savings products in return for a one-off or regular premium payment defined in advance, with such savings products also being paid out at times defined in advance.

The purpose of the statutory guarantee fund for health insurance is to protect substitutive health insurance. Health insurance is referred to as substitutive when it either in part or in whole acts as a substitute for statutory health insurance. That notably applies to comprehensive health insurance and private compulsory long-term care insurance, but not to daily hospital allowance insurance, to supplemental rates for statutory health insurance and to private foreign travel health insurance.

How are my insurance benefits protected if my insurance company threatens to become insolvent and the portfolio of insurance contracts is transferred to the guarantee fund?

The guarantee fund continues all insurance contracts concerned and restructures the portfolio of insurance contracts taken over (section 125 of the Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG). That means that when a life or health insurer becomes insolvent, there is no payment of a one-off compensation amount.

After the restructuring, the portfolio of insurance contracts may also be transferred from the respective guarantee fund to another German insurer, which then becomes your new contractual partner and which continues your contractual relationship. However, such re-transfer is possible only with the approval of BaFin which takes care that the interests of the insured are safeguarded.

Since your insurance relationship continues to exist, you still have an obligation to pay the contractually agreed premiums also after the insurance contract is transferred. In return, you will continue to receive the promised benefits as agreed in the contract. This will not in any way affect your claims to any and all contractually guaranteed benefits as well as with-profit bonuses allotted in the past.

However, the following restrictions do apply:

  • Until the restructuring of the insurance contract portfolio taken over has been completed by the guarantee fund, the policyholders are not allotted any new bonuses (section 125 (4) of the VAG). It is only after the restructuring phase (which also includes repayment to the insurance companies of the capital they made available for the restructuring) has been concluded that bonuses will be issued in accordance with the general provisions.
  • If the resources of the guarantee fund do not suffice to ensure that the insurance contracts are continued, the obligations (for life insurers) under the contracts are reduced by a maximum of 5% of the contractually guaranteed benefits.
  • BaFin may issue orders preventing an extraordinary rise in the number of early contract terminations, since a high number of redemptions will hamper efforts to restructure the insurance contract portfolio taken over. For this purpose it may, for example, impose a temporary ban on terminations.

How are insurance contracts with insurers from other countries from the European Union (EU) or the European Economic Area (EEA) protected?

EU Member States and EEA countries each have their own insolvency protection provisions. Some of them have in place protection schemes for the insurance sector. Since German establishments of insurance companies having their registered office in other EU Member States or EEA countries are subject to the supervision and jurisdiction of their respective home country, insolvency protection is governed by the legal regulations in force there. For that reason, these establishments are not members of the German guarantee funds.

For information regarding the specific protection systems of other Member States, it is advisable to contact the foreign insurance company in question or the competent supervisory authority.