Topic Consumer protection Collective decree: complaints management function and complaints-handling of insurance undertakings

Date: 20.09.2013

Orders concerning the establishment of a complaints management function and supervisory information obligations of insurance undertakings regarding complaints-handling

Based on the collective decree you are, among others, required to submit annually a report on the complaints you received in the previous year. Please note that only complaints resulting from your cross border business in Germany are of interest to BaFin. Thus, reporting may be limited to this kind of complaints. If no such complaints have arisen during the reporting period at least “Nil” should be reported.

To all primary insurers authorised to conduct cross border insurance business in Germany under freedom to provide services or freedom of establishment (section 110a of the German Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG)):

Reference number: VA 43 – I 2512 – 2013/0007

A. Orders

Orders to all primary insurers authorised to conduct insurance business

a) having their registered office in Germany,
b) within the meaning of section 105 of the German Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG),
b) within the meaning of section 110a of the VAG and
b) within the meaning of section 110d of the VAG

with the exception of Pensionskassen. Pension funds and reinsurance undertakings do not fall under the scope of this collective decree either.

In accordance with section 81 (2) sentence 1 of the Insurance Supervision Act (Versicherungsaufsichtsgesetz – VAG) in conjunction with section 64a (1) sentences 1 to 3 of the VAG and section 81 (2) sentence 1 of the VAG in conjunction with section 7 (2) of the Insurance Contract Act (Versicherungsvertragsgesetz - VVG) in conjunction with section 1 (1) nos. 19 and 20 of the Regulation on Information Obligations concerning Insurance Contracts (Verordnung über Informationspflichten bei Versicherungsverträgen – VVG-InfoV), I hereby order:

  1. Insurance undertakings are to establish a complaints management function which enables complaints to be investigated fairly and in a legally correct manner and potential conflicts of interest to be identified, avoided or managed as well as possible.
  2. Insurance undertakings must submit a complaint report to the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) annually on 1 March for the past calendar year either in writing or via the reporting platform, containing a minimum of the following information:

    1. the definition of the terms “complaint” and “complainant” on which the report is based;
    2. the number of complaints received (total number and broken down by class of insurance: life (subdivided into life insurance with profit or life insurance unit linked), health, motor vehicle, accident, third-party liability, legal expenses insurance, building/household, other classes) and a summary of the status of the processing and duration for each complaint;
    3. an overview of the different complaint causes and number thereof in each case;
    4. statements on the number of complaints from each complainant that have been successful, at least partially, during the reporting period.


In accordance with section 81 (2) sentence 1 of the VAG, BaFin may issue any orders with respect to the undertakings, which are appropriate and necessary to prevent irregularities. In accordance with section 64a (1) sentence 1 of the VAG, insurance undertakings must have a proper business organisation in place which ensures compliance with he applicable laws, regulations and supervisory requirements. Proper business organisation requires, in particular, an appropriate risk management system (section 64a (1) sentence 3 of the VAG). A well-functioning and transparent complaints-handling system including appropriate documentation is one of the basic components of an effective risk management system. The VVG in conjunction with the VVG-InfoV, issued on the basis of section 7 (2) of the VVG also sets out requirements in this regard. The European Insurance and Occupational Pensions Authority (EIOPA) published its Guidelines on Complaints-Handling by Insurance Undertakings, EIOPA-BoS-12/069 on 14 June 2012; they entered into force on the same date.

This collective decree serves to ensure that the stated statutory requirements are met and that insurance undertakings treat their customers in a fair and legally correct manner. In issuing this collective decree, BaFin also meets its obligation pursuant to Article 16 (3) sub-paragraph 1 of the Regulation (EU) No 1094/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Insurance and Occupational Pensions Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/79/EC (EIOPA Regulation), to take all efforts necessary to meet the EIOPA Guidelines on Complaints-Handling by Insurance Undertakings.

The requirements for establishing a complaints management function represent an organisational requirement intended to ensure structured complaints-handling as already prescribed by law. Clear assignment of complaints-handling responsibilities prevents the danger of not identifying risks in this area at all or not in a timely manner. Moreover, it ensures that the complaint is handled in a sufficiently transparent and timely manner for the parties affected.

BaFin requires information on an annual basis concerning the number of complaints, the status of the processing and duration, the causes for complaint and the success rate in order to determine whether the insurance undertakings are able to appropriately handle their complaints broken down by class of insurance. Provision of such data enables BaFin to identify irregularities in complaints-handling and to implement the necessary supervisory measures.

Even if insurance undertakings outsource their complaints-handling in full or in part, they continue to bear responsibility for the proper receipt and processing of complaints (section 64a (1) sentence 2 of the VAG).

B. Reference to Circular 3/2013 (VA) – Minimum requirements for complaints-handling by insurance undertakings

This collective decree is supplemented by Circular 3/2013 (VA) – Minimum requirements for complaints-handling by insurance undertakings (reference number: VA 43-I 2512-2013/0007). The circular serves to explain the supervisory expectations with regard to complaints-handling.

C. Entry into force and transitional arrangement

The order to establish a complaints management function under A.1. enters into force on 1 January 2014.
Submission of the complaint report in accordance with the order under A.2. is required for the first time on 1 March 2015.

Rights advisement:

You may file an objection to these orders within one month of issue. The objection must be filed in writing or orally for transcription at Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin), Graurheindorfer Str. 108, 53117 Bonn, or Marie-Curie-Str. 24-28, 60439 Frankfurt.

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