BGH: Invalid clauses in Riester retirement plans - Unravelling pension schemes and life insurance policies

2024-12-22 01:44:43 Politics

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Clauses in Riester retirement plans (government-subsidized private pension schemes) dealing with surplus sharing have been declared ineffective by the BGH (Bundesgerichtshof - Federal Court of Justice) (Az.: IV ZR 38/14). Consumers may also be able to withdraw from their pension schemes and life insurance policies.

GRP Rainer Lawyers and Tax Advisors in Cologne, Berlin, Bonn, Düsseldorf, Frankfurt, Hamburg, Munich, Stuttgart and London conclude: In its judgment of January 13, 2016, the 4th Civil Panel of the Bundesgerichtshof, competent to hear cases pertaining to insurance law, among other things, held that two clauses in Riester retirement plans concerning the sharing of cost surpluses by an insurance company were opaque and thus ineffective. These clauses essentially stipulated that only insured persons with guarantee capital of 40,000 euros or more were entitled to a share of surpluses. The lawsuit was filed by two consumer protection associations.

The requirement of transparency dictates that the contracting parties" rights and obligations be clearly and transparently outlined. This was said to apply to the economic disadvantages associated with the contractual terms as well. It was also said that a rule could be considered to be opaque if it is present at various points in the agreement and it is not easy to associate these parts with each other, or if the contents of these parts are difficult to comprehend because of this.

In the case in question, the Karlsruhe judges were particularly critical of the following passages:
"We shall grant you a share in surpluses pursuant to sec. 153 of the Versicherungsvertragsgesetz (VVG) [Insurance Contract Act 2008] ..."
and - in particular for the purposes of distributing i.a. surpluses from cost savings -
"Regarding these surpluses as well, the policyholders shall receive no less than the percentage stated in the latest version of the MindZV [Mindestzuführungsverordnung - a German insurance regulation] (currently ... 50 per cent ...)."

"Wir beteiligen Sie nach § 153 Versicherungsvertragsgesetz (VVG) an den Überschüssen ...."
und - speziell zur Verteilung u.a. von Überschüssen aus Kosteneinsparungen -
"Auch von diesen Überschüssen erhalten die ... Versicherungsnehmer mindestens den in der jeweils aktuellen Fassung der MindZV genannten Prozentsatz (derzeit ... 50 Prozent ...)."

They took the view that this gave policyholders the impression that they would definitely receive a share of cost surpluses, even though this was not the case in this instance if the guarantee capital amounted to less than 40,000 euros.

Insured persons can now have someone examine whether they are entitled to subsequent payment. A lawyer who is versed in the fields of banking and capital markets law (http://www.grprainer.com/en/legal-advice/capital-markets-law.html) can also assess whether it is possible to completely unravel their pension schemes and life insurance policies. According to BGH case law from May 7, 2014 (IV ZR 76/11), it is possible to withdraw from the agreement if the policyholder was not properly informed about his option to withdraw. In these cases, policies can be revoked even years after they were taken out, because the withdrawal period was never initiated. If they are successful, consumers can expect to get back almost all of the premiums they have paid to date.

http://www.grprainer.com/en/legal-advice/capital-markets-law.html