The Federal Court of Justice unmasks the insurance industry’s sales fairy tales
Emergencies abound in a person’s life, such as when a welfare application is imminent. The question of whether a plaintiff is entitled to legal aid under the poor law is also assessed according to the same standards. This is governed by § 90 SGB XII, the regulations on the so-called Schonvermögen. The single person is regularly spared 1600 Euro (2600 Euro when reaching the age of 60) plus 614 Euro for the spouse.
Slightly higher allowances for jobseekers’ assets
With Hartz-IV there is a basic allowance (§12 Abs. 2 No.1 SGB II) in the amount of regularly 150 Euro per year of life, at least 3,100 Euro, maximum 9,750 Euro for persons born before 1. 1. 1958. Riester contributions subsidised with allowances are also protected against realisation. For old-age provision, there is an additional old-age provision allowance (§ 12 Para. 2 No. 3 SGB II) amounting to 750 euros per year of life, if an exclusion of utilisation has been agreed with the insurance company offering the allowance. For persons born before 1 January 1958, these assets are limited to EUR 48,750. This corresponds to a private old-age pension of around 200 euros for a female pensioner from the age of 65.
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In principle, the entire – even laboriously saved – assets are to be used, clarifies the BGH (judgment of 09. 06. 2010, file no. XII ZB 120/08). The list of § 90 SGB XII – which does not list the basic pension as protected – is exhaustive. Whether a life insurance policy not mentioned therein was exceptionally spared depended on whether a realization would mean hardship in the individual case. Even if, in exceptional cases, it is uneconomical to terminate the policy, it is usually reasonable to lend on it, even if the interest then further reduces the value of the policy.
Capital accumulation via Rürup pension is tolerated only for the secure relief of social welfare
In principle, even a 50-year-old can build up sufficient pension entitlements for his old age, despite periods of unemployment and disability, so as not to become a burden on social assistance. Therefore, the BGH considered achieved pension entitlements of 348 Euros to be sufficient to realise all pension provision in excess of this. Only in exceptional cases, therefore, can the compulsory realisation of even the basic pension contract (possibly in part) be dispensed with if it can be shown that there is a dependency on social benefits at retirement age.
Legal right of termination, even in the absence of a contractual termination option
Who applies for social welfare, ALG II and/or Hartz IV, or on poor law basis a process to lead would like, can be referred in principle to dissolve first once its capital life insurance including the capital saved up in basis pension contracts. Tax-free allowances or limits on discretionary assets regularly do not offer any protection against poverty in old age. However, the usual small pensions from Riester contracts remain untouched.
No Hartz IV security, despite limited garnishment protection for self-employed persons
Finally also the legislator with the reasoning to the law to the seizing-protected age precaution of independent ones, which must fulfill even still more strict conditions than a Rürupvertrag, expressly pointed out that this can be extraordinarily quit, if the social welfare administration rejects a Harz IV claim and refers to the utilization of this age precaution.
Endowment life insurance including Rürup pension contracts: Not Hartz IV-safe
In the case of claims that already exist elsewhere and that avoid the need for social assistance in old age, direct reference can be made to recovery. The insurer must then accept extraordinary termination, even if the ordinary right of termination is excluded, and pay out the surrender value. Although this was clearly stated by the legislator for Rüruprenten contracts, insurers and distributors stubbornly claimed exactly the opposite. The new ruling of the BGH exposes this as a sales fairy tale, just like the Rürüp lie about the alleged seizure security of the basic pension capital before.
Insurer must pay out surrender value of the basic pension contract for Hartz-IV
The surrender value of the basic annuity contract is to be paid out by the insurer in the event of extraordinary termination for recovery due to Harz iv. Nor does the clear legal situation prevent the Rürup saver from being entitled to payment of a surrender value upon ordinary termination. How the surrender value is determined is set out in the German Insurance Contract Act (Versicherungsvertragsgesetz)
§ 169 VVG – Surrender value
(1) If an insurance policy providing cover for a risk, for which the occurrence of the insurer’s obligation is certain, is cancelled by termination by the policyholder or by rescission or avoidance by the insurer, the insurer shall pay the surrender value.
(2) The surrender value is payable only to the extent that it does not exceed the benefit payable in the event of an insured event at the time of termination. The portion of the surrender value not paid thereafter shall be used for premium-free insurance. In the event of withdrawal or rescission, the full surrender value must be paid.
(3) The surrender value is the actuarial reserve of the insurance calculated according to recognised rules of actuarial mathematics with the calculation bases of the premium calculation at the end of the current insurance period It is therefore also not true, what the insurers claim in the alternative, that there is no surrender value at all for Rüruprenten contracts. Rather, it is always calculated from the accumulated actuarial reserve. It is only not payable in the event of ordinary termination because no death benefit is agreed at the time of termination. However, it is nevertheless present in the savings period, because it is used to calculate the non-contributory pension as “premium-free insurance”. However, the surrender value must then actually be paid out in the event of withdrawal or rescission, as well as in the event of extraordinary termination in accordance with § 314 BGB – e.g. because the employment agency does not provide benefits in accordance with ALG II or Harz IV due to the crediting of the saved assets. As wanted by the legislator and confirmed by the BGH again clearly: The Rürupvertrag is not Hartz-IV safe.
Dr. Johannes Fiala
Peter A. Schramm
(The Tobacco Newspaper 12/31/2010)
Courtesy ofwww.konradin.de.
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Dr. Johannes FialaPhD, MBA, MM
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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