Portfolio transfers

(1) Every contract by which the insurance portfolio of a direct insurance undertaking is to be transferred, wholly or in part, to another insurance undertaking requires the approval of the supervisory authorities responsible for the undertakings concerned. Approval must be granted where the interests of policyholders are safeguarded and the obligations arising from the insurance policies are demonstrated to be permanently capable of being fulfilled; section 9(5), on the consultation of the competent bodies of another member state or contracting state, and section 8(4) apply correspondingly.
(2) Where a domestic direct insurance undertaking transfers, wholly or in part, to an insurance undertaking with its registered office in a member state or contracting state a portfolio of insurance contracts that it concluded under section 57 through a branch or in the course of providing cross-border services, only the approval of the supervisory authority responsible for the transferring insurance undertaking is required, by way of derogation from subsection (1), first sentence. Approval is granted where the conditions of subsection (1), second sentence, are met and where 1. it is demonstrated, by a certificate of the supervisory authority of the state of registered office of the transferee insurance undertaking, that the latter has, after the transfer, sufficient eligible own funds to comply with the Solvency Capital Requirement, 2. the supervisory authorities of the member states or contracting states in which the risks of the insurance portfolio are situated consent, and 3. in the case of a transfer of the insurance portfolio of a branch, the supervisory authority of that member state or contracting state has been consulted. The first sentence and the second sentence, point 1, also apply to the transfer of an insurance portfolio acquired domestically. In the cases under the first and third sentences, subsection (5) applies correspondingly; subsections (3) and (4) remain unaffected.
(3) Where members of a mutual insurance association wholly or partly lose their rights as members of the association as a result of the portfolio transfer, approval may be granted only where the portfolio transfer agreement provides for reasonable compensation, unless the transferee insurance undertaking is likewise a mutual insurance association and the members of the transferring association affected by the portfolio transfer become members of the transferee association.
(4) Where insurance relationships with a participation in surplus are affected, the transfer may be approved only where the value of the surplus participation of the policyholders of the transferring and the transferee insurance undertaking is not lower after the transfer than before. In this connection, the assets and liabilities of the transferring insurance undertaking, on the assumption that the insurance relationships affected would be continued at that insurance undertaking, and the assets and liabilities of the transferee insurance undertaking, on the assumption that it assumes the insurance relationships in accordance with the contract for which approval is applied for, are to be compared at their fair value, insofar as they may have an influence on the surplus participation.
(5) The rights and obligations of the transferring insurance undertaking arising from the insurance contracts pass to the transferee insurance undertaking upon the portfolio transfer, including as against the policyholders; section 415 of the Civil Code does not apply.
(6) The portfolio transfer agreement requires the written form; section 311b(3) of the Civil Code does not apply.
(7) Approval of the portfolio transfer must be published in the Federal Gazette. As soon as the portfolio transfer has taken effect, the transferee insurance undertaking must inform the policyholders of the occasion, form, and consequences of the portfolio transfer, in particular of any change, connected with the portfolio transfer, in the authority responsible for legal or financial supervision, and of any change with regard to a claim against a protection scheme in the event of the insurer's insolvency. Where the authority responsible for financial supervision changes, the policyholder may terminate the contract with immediate effect within one month of receiving the insurer's notification. The insurer must draw the policyholder's attention to the right of termination in the notification.