Insurance contract: back payment and recalculation for life insurance policies

Insurance companies need to re-bill:

The Federal Supreme Court clarified by its three judgements of 12.10.2005 that above all with life insurance contracts, which were locked since the “deregulation” ” thus since 1994″, the insurers owe a recalculation.

Incorrect billing in the event of termination and premium waiver:

In essence, the issue is that clauses on the deduction of lapse costs and zillmerisation (if at least about half of the sum of the premiums is not available as surrender value or unzillmerised actuarial reserve) are non-transparent and thus inadmissible.

Acquisition costs and lapse discount:

Both the acquisition costs and the lapse discount disadvantage the policyholder or are considered to be non-transparent. The judgements refer “only” to contracts up to about the middle of 2001 – however, also later contracts are probably in the fire.

Cases of exemption from contributions also affected:

Similarly, cases of exemption from contributions should be recalculated. According to publications by experts, in less than half of all cases life insurance policies are kept in force until the contractually agreed end date.
Practical enforcement: First of all, the insurer is to be requested to re-bill. This is a procedure that is also well known to the banking industry – for example, when interest rate advantages were not passed on to the customer in the case of current and credit accounts and inadmissible fees were charged to the accounts. Re-billing can result in significant additional credits – it should be reviewed professionally (e.g. by an actuary, expert).


Some insurers believe that claims in this regard are fully or partially time-barred. The legal situation is likely to be similar to that of credit institutions that have incorrectly settled their customers’ accounts for financing or loans for years or decades (with corresponding “adjustment” of their account settlement EDP):

A presiding judge of the Federal Court of Justice (BGH) said at the so-called “Bank Law Day” that nothing can become time-barred if the customer does not know about it.

Special features in the case of salary conversion:

Insurance brokers face particular problems in this area, because the usual costs (for administration, commission, etc.) of a KLV in business with private customers can lead to at least partial invalidity (also of the insurance contracts!).


by Dr. Johannes Fiala

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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.
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