Protektor Lebensversicherungs-AG is the mechanism set up by German life insurers for the protection of policyholders’ interests. The guarantee mechanism protects policyholders against the consequences of a life insurer becoming insolvent: Contracts are carried on, retirement benefits and term coverage are maintained as well as bonus shares already allocated.
Protektor operates on the basis of the statutes, which assign the company the task to reorganise the insurance contract portfolios of insolvent life insurance companies. To this effect, Protektor takes over the contracts of a non-performing company, reorganises the investment portfolio, manages the insurance portfolios and transfers these in part or completely to other companies. The reorganisation measure is not aimed at the financial recovery of an insolvent company.
The shareholders of Protektor Lebensversicherungs-AG are the life insurance companies subject to German legal and financial supervision and members of the German Insurance Association (Gesamtverband der deutschen Versicherungswirtschaft e.V - GDV). In 2002 these shareholders took the initiative to establish Protektor as a rescue company. In 2003 the portfolio, which to date is the only one to be transferred, was taken over and has been managed since then.
Besides, in May 2006 Protektor assumed the tasks and powers of the statutory Guarantee Fund established by the legislator on the basis of an Act at the end of 2004. In future, insurance contract portfolios of insolvent life insurance companies will be transferred by order of the Federal Financial Supervision Authority only to this Guarantee Fund and will be managed by Protektor.