Financing the insurance guarantee fund

The insurance guarantee fund financing is designed to continue the insurance coverage. The fund is financed by the members’ annual fees. At most, this is equal to 0.2‰ of the German life insurance companies’ net technical reserves until a sum of 1‰ of the net technical reserves has been reached (as of 12/2022: approx. € 1.2 billion). In 2010, the insurance guarantee fund’s capital was accumulated in full. It is adapted every year to the insurance companies’ net technical reserves.

If the insurance guarantee fund is required to rehabilitate the insurance portfolio of a life insurance company that is in trouble, aditional payments can be levied. This requires the Federal Financial Supervisory Authority (Bafin) to order a transfer of the insurance portfolio to the insurance guarantee fund (Section 222, Subs 2 (in German language) of the Law on the Supervision of Insurance Undertakings (VAG)). The Federal Ministry of Finance has passed a directive with detailed regulations on the financing of the insurance guarantee fund („Sicherungs-Finanzierungs-Verordnung (Leben), or SichLVFinV (in German language)“).