Insurance benefits and insurance premiums in the event of insolvency of the insurance customer

Insolvency creditors normally have to register their claims in the table and can immediately write off up to more than 90%. The rate is often just above zero. Nevertheless, there are numerous exceptions to the rule of how to get your money despite the insolvency of the debtor.


Maintenance obligations and intentional tort


Neither for arrears of maintenance debts nor for debts determined in the insolvency table due to unauthorised actions is there a residual debt discharge through the private insolvency, section 302 InsO. It also covers periodic penalty payments, fines and penalties. This is the case, for example, in the case of unemployment benefits that were wrongly received, social security contributions that were not paid, or in the case of fraudulent receipts. Another variant is the conviction for evaded taxes. The debtor could, however, lodge an objection in the case of the tort in question – initially without the obligation to state reasons, and the creditor would then have to file an action.


The insolvency administrator and creditors regularly make personal claims against the managers of a company, so that private subsequent insolvency will often occur. In particular, the accusation of delaying the filing of insolvency is a criminal offence.


100% quota in liability insurance law


If the insolvency debtor owes compensation for which cover is provided by a liability insurance policy within the meaning of § 100 VVG, the creditor can demand separate satisfaction after the insolvency proceedings have been opened, § 110 VVG. The proceeds from the realisation of the indemnity claim against the insurer are then paid to the injured creditor. If the insurance cover is too low, or if there is no obligation to pay because of the debtor’s intent, § 103 VVG, the claim would have to be reported to the table.


For the separate satisfaction a binding determination is required, § 106 VVG. This can be done before the opening of insolvency proceedings by court judgement, at any time also by (possibly notarial) acknowledgement of debt, but also by unopposed registration in the insolvency table.

If the liability claim and the right to separate satisfaction have been determined after examination by the insolvency administrator, the right to separate satisfaction is transformed into a claim for payment against the insurer, with the injured party’s direct right to collection, § 1282 BGB analogously.


For the purpose of acceleration, the aggrieved party may assert separate satisfaction by means of an action for payment against the insolvency administrator, limited in amount to the sum insured. A prevailing (liability) judgment results in the insurance cover becoming due. If the insurer disputes his obligation to provide cover, the injured party must still file a claim for cover against the liability insurance – and as a precautionary measure also file his claims for the table with the insolvency administrator.


Special creditor protection for compulsory insurance


If the insurance is compulsory, the injured party can demand that the insurer pay the insurance benefit directly from the insurer, including his own direct action, §§ 113 ff. VVG. Insurance brokers and tax consultants, for example, are compulsorily insured by law.

The risk taker, in turn, is entitled to all the usual objections. The direct claim of the aggrieved party exists in the case of the opening of insolvency proceedings, or rejection for lack of assets, as well as if the aggrieved party cannot be found, § 115 InsO.

A direct claim can also arise contractually through (timely) assignment of the claim for indemnification against the insurer, § 108 InsO. However, an assignment “in the event of insolvency” or shortly before insolvency would be null and void or usually contestable, section 133 I InsO.


Approved destruction of the existence of the managing director by the insolvency administrator


The insolvency administrator is not obliged to maintain a manager liability insurance in favour of the managers – with payment by the insolvency estate (BGH, decision of 14.04.2016, Az. IX ZR 161/15). This could only be different if the former manager is foreseeably financially unable to perform.

If the manager insurance is structured according to the principle of claims-made, which is frequently used there, any claims made by the insolvency administrator against the manager would no longer be covered after termination of the D&O insurance. Some insurance conditions already contractually provide for the end of the manager’s insurance in the event of insolvency, i.e. without the insolvency administrator giving notice in order to protect his assets. This means that breaches of duty prior to insolvency are mostly not insured – alternatively, recourse claims against insurance brokers for such gaps in cover will then take effect, which the director or manager will look for in vain in the broker’s consulting documentation.

Many an ex-managing director or board member was surprised that when a claim was reported after insolvency, the (financial loss) legal protection of the company already no longer existed.


Co-insurance – the insurance for third party account


If, for example, a business manager is co-insured in the company legal expenses insurance (RSV), the material right to the insurance benefit of the insured person (CP), § 44 I VVG. On the other hand, the policyholder (UN) is formally entitled to dispose of and bring an action, Section 45 I VVG – however, he may grant the Merchant a corresponding permit or hand over the insurance policy, which gives the Merchant the right of disposal in addition to the UN.

This means that the co-insured ex-manager bears the risk of legal costs in the event of the company’s insolvency if he had to sue the insolvency administrator for RSV benefits, because RSV cover “in causal connection with insolvency proceedings” is excluded, § 3 III c ARB.

If an RSV payment is made to the UN (or insolvency administrator, section 80 InsO), this money shall be paid out to the Merchant, as the UN receives it as a trustee. Merchant shall be entitled to separate or substitute separation, §§ 47, 48 p.2 InsO. The same applies to residential building insurance if a condominium owners’ association (WEG) as UN co-insures in particular the special property (BGH, ruling of 16.09.2016, ref. V ZR 29/16).

The claim against the RSV is based on indemnification – i.e. direct payment of legal counsel. Any payment to the UN thus has no effect on fulfilment (BGH, ruling of 16.07.2014, ref. IV ZR 88/13).

Only when the lawyer has already been paid does the claim for indemnification turn into a claim for payment against RSV. If the UN has paid (§§ 670, 812 I 1 BGB), he may set off against the Merchant the payment received from RSV. If the CP has paid, the UN (or InsO administrator) will have to forward the money from the RSV to the CP.

Conversely, any (cost) reimbursement claims against third parties are transferred to the VN, § 86 VVG.


Co-insurance in the form of a manager’s liability insurance


The D&O insurance is also one for third parties. However, only Merchant shall be authorized to dispose of manager liability, Section 10.1 GCSD.

However, the D&O insurer is only obliged to provide benefits if the insured is seriously claimed, for which a lawyer’s letter with detailed reasons is sufficient (BGH, judgement of 13.4.2016, ref. IV ZR 304/13).

The Merchant may assign its claim for indemnification to the aggrieved UN, whereby the claim is transformed into a claim for payment, Section 108 VVG. This would also be conceivable in anticipation, for example under the suspensive condition of serious recourse, but with the consequence that

(Corporate) RSV will first of all invoke the fact that it does not want to pay for assigned claims: However, this can be clarified at least in advance by means of a side letter to the ARB.

The insurer would only be exempt from paying benefits if an abuse is evident, for example “if the claim for damages of which the plaintiff [VN] is famous did not actually arise or did not arise in the claimed amount and if the plaintiff and the insured were aware of this” (BGH, loc. cit.).


Private health insurance (PKV) is not insolvency-free assets


Claims to private health insurance premiums before the opening of proceedings are normal insolvency claims, §§ 38 f. InsO (BGH, judgement of 07.04.2016, Az. IX ZR 145/15).

“Neither section 850b (1) no. 4 ZPO nor section 850e no. 1 sentence 2 lit. b ZPO is relevant. For these provisions concern the attachability of claims of the debtor”,

the BGH states. This means that only the benefits of the private health insurance to the UN are largely protected against attachment.

If the private health insurance company pursues its premium claims for months, also in court with subsequent instalment payment agreement, payments of the debtor can be contested on the grounds of recognised suspension of payments, § 133 InsO (Federal Court of Justice, ruling of 25 February 2016, file no. IX ZR 109/15). However, in the case of full insurance policies, non-payment or challenge by the insolvency administrator does not eliminate the private health insurance contract, but at best leads to a changeover to the emergency tariff, § 193 VII VVG.

This is often chosen in advance to save a considerable amount of premium, because in contrast to a tariff change to lower-performance tariffs, the previous insurance cover can be promptly restored at any time by simply paying outstanding premium arrears.

The insolvent UN can effectively transfer the premiums from a P account, § 850k ZPO, or pay them as a cash transaction, § 142 InsO.


by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm


by courtesy of (published on 04.01.2017)




Our office in Munich

You will find our office at Fasolt-Strasse 7 in Munich, very close to Schloss Nymphenburg. Our team consists of highly motivated attorneys who are available for all the needs of our clients. In special cases, our law firm cooperates with selected experts to represent your interests in the best possible way.

About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
»More about Dr. Johannes Fiala

On these pages, Dr. Fiala provides information on current legal and economic topics as well as on current political changes that are of social and/or corporate relevance.

Arrange your personal appointment with us.

Make an appointment / call back service

You are already receiving legal advice and would like a second opinion? In this case please contact Dr. Fiala directly via the following link.

Obtain a second legal opinion

(The first phone call is a free get-to-know-you conversation; without consulting. You will learn what we can do for you & what we need from you in terms of information, documents for a qualified consultation.)