Maintenance of the insurance contracts

(1) Where the supervisory authority determines that the conditions of section 314(1), first sentence, are satisfied at an insurance undertaking that is a member of a protection fund, or where a notification under section 311(1), first or second sentence, from such an insurance undertaking has been received, it transmits this determination to the protection fund and informs the insurance undertaking concerned of this.
(2) Where necessary to safeguard the interests of the insured, the supervisory authority orders the transfer of the entire portfolio of primary insurance contracts, together with the assets necessary to cover the liabilities arising from those contracts, to the competent protection fund; section 13 does not apply. The order has effect in rem in respect of the assets concerned.
(3) The rights and obligations of the transferring undertaking arising from the insurance contracts pass to the protection fund upon the portfolio transfer, including in relation to the policyholders; section 415 of the Civil Code does not apply.
(4) The protection fund administers the contracts taken over, which must be kept separately according to the individual insurance portfolios taken over, separately from its remaining assets, and accounts for them separately within the annual report to be prepared under section 227(1). It determines without delay the amount necessary for full coverage of the obligations arising from the insurance contracts and provides suitable qualifying assets. Section 15(1), section 23(1) and (2) to (6), section 26(2), (5), and (6), section 28(2), and sections 30, 32, 47, points 8 to 10, section 88(3), sections 124, 138, 139, 141, 142, 143, second half-sentence, sections 146 to 160 and 336, and the statutory instruments issued on the basis of section 39(1), first sentence, points 1 to 4, 6, and 7, apply correspondingly in this respect. Section 26(1) applies with the proviso that the risks to which the undertaking is actually or possibly exposed must be adequately documented on a regular basis. Section 29(1) applies with the proviso that no compliance function need be maintained. Section 140(2) and (3) applies to the insurance contracts administered by the protection funds as soon as the supervisory authority has determined that the recovery of a portfolio taken over has been completed and the capital made available to the protection fund for this purpose has been returned to the contributing insurance undertakings.
(5) Where the examination under subsection (4) shows that the existing tied assets under section 226(3), together with the special contribution to be levied under section 226(5), fifth sentence, or the special contribution to be levied under section 226(6), second sentence, are not sufficient to ensure the continuation of the contracts, the supervisory authority reduces, for life insurance contracts, the obligations arising from the contracts by up to 5 percent of the contractually guaranteed benefits. The supervisory authority may also make orders to prevent an exceptional increase in the number of early contract terminations.
(6) The protection fund may transfer the insurance portfolio, wholly or in part, to undertakings authorised to conduct insurance business in Germany; section 13 applies correspondingly to this transfer. The protection fund may amend the terms of insurance and the tariff provisions of the contracts to be transferred at the time of the transfer, in order to adapt them to the circumstances of the transferee insurer, where this is expedient for the continuation of the contracts with the transferee insurer and reasonable for the insured persons. The amendment takes effect where it adequately takes into account the interests of the insured while preserving the purpose of the contract, and an independent trustee confirms that this condition is satisfied. Sections 142 and 157(3) apply correspondingly to the trustee.
(7) Upon the order for the portfolio transfer to the protection fund, the authorisation to conduct business of the transferring insurance undertaking lapses.
(8) An objection and an action for annulment against the supervisory authority's order do not have suspensive effect.