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press report
-The "eternal" right to object in practice

VP customers of life insurance companies have under certain conditions a "perpetual" right to object. Since the Federal Supreme Court (BGH) ruled this two years ago (ref IV IV ZR 76/11, see BaFinJournal November 2014 and info box on page 21), the consequences have affected both consumers and companies alike.

Many policyholders are wondering if this option is appropriate for them. This is usually the case when they have their contract - regardless of whether he is still running or has been terminated - between 1994 and the end of 2007 according to the policy model (see info box page 20) have closed and the insurer at that time not properly over their right to object. If so, they must check whether an afterthought is worthwhile - depending on the individual situation, it may also make more sense to simply continue the contract.

Many also answer this question with yes. Since the BGH judgment, life insurers have therefore been exposed to a high number of contradictions. This poses great challenges for them, since it is partly about contracts that have already been completed for several years. Companies must check the justification of each individual contradiction. This leads to a high administrative burden - in addition to any repayments.
Since the judgment of 2014, the BGH and other German courts have clarified various legal questions about its effects. These were also regularly the subject of consumer complaints at BaFin. This article explains what rights consumers have in concrete terms.


Opposition instruction properly?
According to § 5a of the German Insurance Contract Law (VVG), a proper statement of contradiction in the respective contracts must inform the policyholder of his right of objection in a form that is clear in terms of printing technology. Among other things, it must also inform it when the 30-day opposition period begins, namely at the time when the policyholder's insurance policy, conditions of insurance and consumer information are received by the policyholder. In the case of contracts concluded from 1 August 2001, the instruction must also contain the notice that the objection must be made in text form; It is not only possible by letter, but also by e-mail, for example.

The jurisprudence has further substantiated the formal and substantive requirements for a proper explanation of contradiction. Formally, for example, the addressee of the objection - the insurer - does not have to be named in it, since according to the BGH it is easily recognizable to the customer (Ref. IV ZR 496/14). According to the Federal Court of Justice, both the outline and the bold print can be considered as clearly emphasizing the printing technique if the rest of the text is not also printed in bold (ref. IV ZR 41/13 and IV ZR 35/14). In terms of content, the term "text form" does not need to be explained in the instruction (inter alia BGH Az. IV ZR 29/13). The policyholder can understand from this term that the opposition must be transmitted in readable form and the author must be recognizable, so the reasoning of the BGH.

Many consumers who do not feel that they are correct are contacting the BaFin with a complaint. For example, in one case, the insurer had stated that the opposition period starts at the time the policyholder receives the policyholder. However, this is insufficient: as a result, according to § 5a (1) and (2) VVG aF, it has been legally confirmed that the instruction must show that the period does not begin until the policyholder has also received the insurance conditions and consumer information.

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Amount of the repayment claim
As a legal consequence of an effective opposition, the BGH ruled in 2014 that the policyholder can, in principle, demand reimbursement of the premiums he has paid to the insurer. From this the deduction of the insurance cover that the customer enjoyed during the contract - this could be about the risk portion of the premium. In several follow-up decisions, the BGH recognized additional items as deductible (Ref. IV ZR 384/14, IV ZR 448/14 and IV ZR 513/14):

- the withholding tax and the solidarity surcharge which the insurer has paid to the tax office in the event of early termination upon payment of the surrender value to the policyholder

- the surrender value that the insurer paid to the policyholder in the event of termination

- for unit-linked life insurance, the losses of the funds in which the savings portions of the contributions have been invested.

Usage interest must also be surrendered in principle, ie interest that the insurer has earned with the insured person's contributions. However, in relation to the insurer's earnings situation, the latter must prove that the company has actually achieved interest rates. A flat-rate claim, say of "5 percent above the base rate", is not enough.

In contrast, the insurer must always repay the full costs of closing and administrative costs as well as installment payment premiums to the customer in the event of a successful opposition.

BaFin also receives complaints about this, for example because former policyholders complain that they do not receive the withholding tax and the solidarity surcharge that their insurer paid off after the notice of termination. Here, however, the insurers are in the right, because the policyholders have already been exempted from their tax debt by the transfer to the tax office and have enjoyed a financial advantage. BaFin refers the complainants in such cases.

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forfeiture
Many consumers also complain to BaFin because their life insurer has called for forfeiture. The policyholder paid contributions over many years and thus implicitly stated that they wanted to stick to the contract, according to the argument. If he now contradicts the contract, he is acting improperly contrary to his previous behavior ("venire contra factum proprium").

It is true that the Federal Court of Justice (BGH) issued a ruling in 2014 that, after many years of paying premiums, a properly trained policyholder can no longer invoke the ineffectiveness of the contract (ref. IV ZR 73/13). However, this does not apply if the customer has not been properly instructed: then the insurer has brought about the situation itself and can not invoke forfeiture in principle, said the BGH in his above-mentioned exit decision.

As a result, some courts have granted exemptions on the basis of specific circumstances of the case: For example, a policyholder had twice surrendered his life insurance contract to a bank for the first time two months after the conclusion of the insurance contract (BGH Az. IV ZR 130/15 ). In another case, a contract that had already been terminated had been reinstated in 2000 at the request of the customer before it contradicted the contract in 2009. This is according to BGH a "roughly contradictory behavior" (Az. IV ZR 117/15). An insurance agent who knew the right of objection at the time of the conclusion of the contract in 1998 acted in the view of the Higher Regional Court in Stuttgart as abusive in 2008, when he objected in 2008 on the grounds of a non-printing instruction (file 7 U 147/10).

In contrast to a consumer who complained to BaFin, an insurer had justified the forfeiture by stating that the contract was "settled" for the customer for several years due to the termination in 2008. However, this is contrary to the decision of the Federal Court of Justice: The right to object exists even if the contract has already been terminated or has expired.

Source: Bafin - Journal (October 2016) New text

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