A. Introductory remarks

To all primary insurance undertakings 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 circular either.

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. EIOPA considers the guidelines to contain the necessary minimum standards for complaints-handling.
This circular serves to implement the guidelines into national supervisory practice and supplements the collective decree dated 20 September 2013 – Orders concerning the establishment of a complaints management function and supervisory information obligations of insurance undertakings regarding complaints-handling (reference number: VA 43-I 2512-2013/0007).

Insurance undertakings should always respond appropriately to complaints, even if the scope of this circular has not been established, and – where possible – refer complainants to the undertaking responsible for complaints-handling.

B. Minimum requirements for complaints-handling by insurance undertakings

B.1. General – Definitions

Legally correct and fair treatment of customers is an important aspect of consumer protection. In accordance with section 64a (1) sentence 1 of the VAG, insurance undertakings must have a proper business organisation which ensures compliance with the applicable laws, regulations and supervisory requirements. In accordance with section 64a (1) sentence 3 of the VAG, proper business organisation particularly requires appropriate risk management. A well-functioning and transparent complaints-handling system including appropriate documentation is one of the basic components of an effective risk management system. The Insurance Contract Act (Versicherungsvertragsgesetz – VVG) in conjunction with the Regulation on Information Obligations for Insurance Contracts (VVG-Informationspflichtenverordnung – VVG-InfoV), issued on the basis of section 7 (2) of the VVG also sets out requirements in this regard.
If the minimum requirements for complaints-handling include principle-based objectives, these are to be met taking into account the risks specific to the undertaking, the nature and scope of the business operations as well as the complexity of the insurance undertaking’s business model. Generally speaking, these minimum requirements aim to secure a certain (consumer) protection level for the insured parties/policyholders, which must be maintained.

The following indicative definitions apply to the minimum requirements listed in this circular:

a) Complaint

Complaint means a statement of dissatisfaction addressed to an insurance undertaking by a person relating to the insurance contract or service he/she has been provided with. This definition also includes complaints addressed to insurance undertakings with reference to an insurance intermediary. Complaints-handling should be differentiated from claims-handling as well as from simple requests for execution of the contract, information or clarification.

Such statements need not be headed with the word “complaint” to be considered a complaint.

b) Complainant

Complainant means a person who is presumed to be eligible to have a complaint considered by an insurance undertaking and has already lodged a complaint e.g. a (potential) policyholder, insured person, beneficiary or injured third party.

B.2. Internal complaints management policy

Insurance undertakings should put in place internal complaints management policies. The management board of the insurance undertaking is responsible for defining and endorsing such policy. The management board is also responsible for implementation of, and monitoring compliance with the internal policy.

The internal policy must be put into writing. It must refer to the treatment of complainants. The internal policy must be made available to all staff of the insurance undertaking involved in handling complaints, via adequate internal channels.

The internal policy should include processes for the following areas, to the extent possible:

a) Lodging complaints:

Lodging a complaint should be possible by all customary means (verbally, in writing, in electronic form, by the complainant personally or by a representative). The undertaking should develop its own interpretation of the indicative definitions under B.1. a) and b) concerning the terms “complaint” and “complainant”, record these definitions and apply them thus in handling complaints.

b) Complaints-handling:

The internal policy should include, in particular, deadlines for handling complaints. They should also include standards for determining the legally correct and fair treatment of complainants. The internal policy should also detail the data protection requirements for complaints-handling and record how these are to be correctly met. Moreover, it should include provisions on how potential conflicts of interest are to be identified in complaints-processing and the best means of avoiding or managing them. The internal policy should ensure that complaints are processed quickly, fairly, in a legally correct manner, efficiently and with equal application of previously defined criteria.

c) Training:

The internal guidelines should provide for adequate training of the staff involved in handling complaints.

d) Compliance with the internal policy:

The internal policy should contain processes for monitoring compliance, following up compliance measures and a related internal reporting system.

The afore-mentioned minimum requirements do not affect the freedom of insurance undertakings to internally implement/apply the internal policy in the specific manner they choose.

B.3. Complaints management function

In accordance with the collective decree dated 20 September 2013 (reference number: VA 43-I 2512-2013/0007), 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. In so doing, undertakings are to appoint one or more experienced person(s) directly beneath board level, if possible, to bear responsibility for proper performance of complaints-handling duties.

The complaints management function is responsible for ensuring compliance with internal complaints management policy, regardless of management board responsibility in this regard. Moreover, it should, to the extent possible, ensure the necessary internal flow of information and the necessary internal reporting lines, particularly to management board, and continuously monitor complaints management for effectiveness and efficiency.

The complaints management function may be centralised or decentralised; however the required analysis (B.6. sentence 1) may only be performed centrally. The responsibilities and individual tasks are to be clearly defined. The compliance management function should be structured in such a way that it is free of conflicts of interest as far as possible.

B.4. Registration

Complaints are to be immediately registered internally in an appropriate manner (e.g. in a secure electronic register) and securely (data protection/data security). Registration should include, to the extent possible – particularly in legal terms:

a) the subject of the complaint and the class of insurance it refers to (life (subdivided into complaints about life insurance with profit or life insurance unit linked), health, motor vehicle, accident, third-party liability, legal expenses insurance, building/household, other classes),
b) the complainant's master data,
c) data on receipt and processing of/response to the complaint,
d) the result of the complaint process.

Complaint documentation is, to the extent possible, to be securely archived for an appropriate period of time (data protection/data security). If complaints relate to staff of the insurance undertaking or, in case of outsourcing, to staff of the service provider, this does not affect employment protection law issues.

B.5. Information obligation

In accordance with the collective decree dated 20 September 2013 (reference number: VA 43-I 2512-2013/0007), insurance undertakings must submit a complaint report to the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin).

They are also expected to use their influence to obtain knowledge of complaints lodged with their tied agents within the meaning of section 34d (4) of the Industrial Code (Gewerbeordnung – GewO), which they should also enter into their own internal complaints system and of which they are also to notify BaFin. Only in this manner can complaints be fully documented and comprehensive complaints-handling ensured regardless of whether complaints are lodged with the agent or with the insurance undertaking.

B.6. Internal follow-up of complaints-handling

Insurance undertakings are to analyse the complaints-handling data on an ongoing basis (complaints analysis) to ensure that recurring or systemic problems and potential legal and operational risks are identified and remedied. The following measures are to be taken into account:

a) identification and analysis of the background of each individual complaint to determine the root causes common to certain types of complaint;
b) considering whether such root causes may also affect other processes or products, including those not directly complained of; and
c) correcting, where reasonable to do so, such root causes.

Undertakings should also ensure, to the extent possible, that all relevant areas in the company receive the information necessary for performing their duties on recurring or systemic problems, and that they document the measures they have taken on the basis of this information. The complaints management function is to be informed of these measures.

B.7. Provision of information

The insurance undertakings shall

a) inform the complainant, upon request or when acknowledging receipt of a complaint, about the complaints-handling process, in writing if the complainant so desires;
b) inform the complainant about the further handling of the complaint should immediate processing not be possible;
c) provide clear, accurate and up-to-date information about the complaints-handling process, which includes:

d) publish the details under c) in an easily accessible manner, for example, in brochures, pamphlets, contractual documents or via the insurance undertaking’s website.

B.8. Procedure for responding to complaints

The insurance undertakings shall

a) seek to gather and investigate all relevant evidence and information regarding the complaint;

b) communicate in plain language, which is clearly understood;

c) provide a response without any unnecessary delay; when an answer cannot be provided within the expected time limits, the insurance undertaking shall inform the complainant in an appropriate manner about the causes of the delay and indicate when the insurance undertaking’s investigation is likely to be completed;

d) when providing a final decision that does not fully satisfy the complainant’s demand, include a thorough explanation of the insurance undertaking’s position on the complaint and set out the complainant’s option to maintain the complaint (e.g. the option of approaching an ombudsman, BaFin, availability of an alternative dispute mechanism, etc.). Such decision should be provided in writing if the complainant so desires.