Legislation on Insurance in Germany

Insurance laws in Germany

The Insurance Supervisory Act (Versicherungsaufsichtsgesetz) is the main legislation governing insurance and reinsurance activities in Germany. The German Insurance Supervisory Law provides for the following:

• -          licensing for insurance and reinsurance companies;
• -          share capital requirements for insurance and reinsurance companies;
• -          competences of these type of companies.

The Insurance Contract Act is the main legislation applying to insurance agreements in Germany. Recently, a new legislation on insurance was enabled: the Life Insurance Reform Act. Additionally, the German Commercial Code and the Trade Regulations Act also contain provisions with respect to insurance companies. Other laws related to insurance activities in Germany are:

• -          the Investment Regulation;
• -          the Capital Adequacy Regulation;
• -          the Regulation on the Financial Reporting of Insurance Companies.

All insurance and reinsurance companies in Germany fall under the supervision of the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, BaFin).

Types of insurance companies in Germany

The German insurance legislation allows for the following types of companies to provide insurance and reinsurance services:

• -          stock corporations;
• -          mutual insurance associations;
• -          public law companies.

Foreign investors wanting to open insurance companies in Germany are allowed to register them as joint stock corporations. Foreign insurance companies are allowed to establish branch offices or subsidiaries in Germany. For information about the requirements for opening an insurance company you may refer to our German lawyers.

Insurance policies in Germany

Insurance policies are covered by the German Civil Code which establishes the protection of customers concluding these types of contracts. The German Insurance Association is the main regulatory authority providing for the standard terms and conditions for drafting insurance policies. The terms and conditions are customized in accordance with the types of services provided by the insurer and cover both private and commercial contracts in order to avoid litigation.

If need more information about the legislation on insurance in Germany, do not hesitate to contact our law firm.