Act on the Supervision of Insurance Undertakings
(Versicherungsaufsichtsgesetz, VAG)
Section 11a
Appointed actuary in life insurance
(1) Every life insurance undertaking shall appoint a responsible actuary. This appointed
actuary must be reliable and qualified. Qualification presupposes sufficient knowledge of
actuarial theory and professional experience. Adequate professional experience shall be
deemed given if documentation can be furnished of at least three years of experience as an
actuary.
(2) The name of the designated appointed actuary must be submitted to the Supervisory
Authority, together with the information necessary to assess reliability and qualification in
accordance with subsection (1) above before appointment. If there is evidence that the
designated appointed actuary does not meet the requirements for reliability or qualification,
the Supervisory Authority may require that another person be appointed. If, after the
appointment, there should be evidence of circumstances which would have prevented
appointment, or if the appointed actuary does not properly fulfill the duties under this Act, the
Supervisory Authority may require that another appointed actuary be appointed. If the
designated or the newly appointed actuary in the cases mentioned in sentences 2 and 3 also
fails to meet the requirements, or if no new appointment is made, the Supervisory Authority
may itself appoint an actuary. The Supervisory Authority shall be informed immediately upon
resignation or dismissal of the appointed actuary.
(2a) Appointment or dismissal of the appointed actuary is subject to the approval of the
supervisory board. If a small mutual association (section 53) has no supervisory board, the
management board appoints the actuary unless the memorandum and articles of association
stipulate appointment by the senior representative body.
(3) The duties of the appointed actuary are as follows:
1. To ensure that the calculation of premiums and the premium reserve is in line with the
principles of section 11 above and the regulations issued pursuant to section 65 (1) and
section 341f of the Commercial Code. In the process, the appointed actuary shall
assess the financial situation of the undertaking, in particular with respect to whether
or not the undertaking is in a position to fulfill its liabilities under the insurance
contracts at all times and whether it disposes of adequate resources in the amount of
the solvency margin.
2. Except in the case of a small mutual association (section 53 (1), sentence 1), the
appointed actuary shall certify at the end of the balance sheet that the premium reserve
has been established in accordance with section 341f of the Commercial Code and the
regulations issued in accordance with section 65 (1) below (actuarial certification);
this is without prejudice to section 341k of the Commercial Code relating to auditing.
He shall specify in a report to the management board of the undertaking the
calculation basis and any additional assumptions upon which the certification is based.
3. In the event that, in the performance of the assigned duties, the appointed actuary
recognises a possibility that circumstances will preclude the granting of a certification
in accordance with number 2, or allow only a qualified certification, he shall inform
the management board and, if the board does not immediately remedy the situation,
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the Supervisory Authority without delay; in the event that, in the performance of the
position as appointed actuary, facts are discovered which could threaten the going
concern status of the undertaking or seriously hinder its development, he shall
immediately inform the management board and the Supervisory Authority.
4. For with-profits policies, the appointed actuary shall submit to the management board
proposals for suitable participation in the surplus.
(4) The management board of the undertaking is obliged
1. to make available to the appointed actuary all the necessary information which will
enable him to fulfill his duties properly pursuant to subsection (3) above, and
2. to submit to the Supervisory Authority the report accompanying the actuarial
certification in accordance with subsection (3) no. 2 above.
(5) Subsection (3) no. 1 sentence 1 and no. 2 sentence 2, as well as subsection (4) no. 2 do not
apply to death benefit funds. The assessment obligation pursuant to subsection (3) no. 1
sentence 2 shall also apply in such cases. Subsection (3) no. 2 sentence 1 above applies,
except for small mutual associations (section 53 (1) sentence 1), with the proviso that the
certification mentioned there is replaced with a certification that the premium reserve has
been established in compliance with the approved operating plan (actuarial certification).
(6) The Federal Ministry of Finance is authorized to issue by regulation supplementary
provisions on the wording of the actuarial certification and any further details regarding the
content and scope as well as the deadline for submission of the report pursuant to subsection
(3) no. 2 and subsection (5) above. This power may be delegated by regulation to the
Supervisory Authority. The latter shall issue the rules in consultation with the supervisory
authorities of the individual federal states.
Section 11d
Accident insurance with premium refund
If accident insurance undertakings write contracts with premium refund, sections 11 to 11c
above apply accordingly.
Section 11e
Premium reserve (Deckungsrückstellung) for benefit obligations in third party
liability and accident insurance
For the calculation of the premium reserve for benefit obligations under general third party
liability insurance, motor third party liability insurance, motor vehicle accident insurance and
general accident insurance without premium refund section 11a above applies accordingly.
Section 12
Substitutive health insurance
(1) To the extent that health insurance is suitable as a full or partial substitute to statutory
health insurance (substitutive health insurance) it shall be operated in Germany only in
accordance with the technical principles of life insurance, i.e.
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1. premiums shall be calculated in accordance with actuarial principles on the basis of
probability tables and other pertinent statistical data, specifically taking into account
any relevant assumptions with respect to the risk of invalidity and illness, to mortality,
to the dependence of the risk on age and gender and to the probability of cancellation,
also taking into account safety loadings and other loadings and a technical interest
rate,
2. the ageing provision is to be recognized in accordance with section 341f of the
Commercial Code,
3. in the insurance contract, the right of termination without cause for the insurance
undertaking must be excluded, in daily benefits insurance from the fourth policy year
at the latest, and a premium increase permitted,
4. the insurance contract shall grant the policyholder the right to policy alteration by
choosing other premium scales with comparable coverage while maintaining the rights
and ageing provision entitlements acquired so far under the contract.
(2) Insurance undertakings active in substitutive health insurance business shall appoint a
responsible actuary. Section 11a (1) sentences 2 to 4, as well as (2) and (2a) apply
accordingly.
(3) The duties of the appointed actuary are as follows:
1. To ensure that in calculating the premiums and mathematical provisions, in particular
the ageing provision, the actuarial methods (subsection (1) nos. 1and 2 above) are
followed and the rules of the regulation issued pursuant to section 12c below are
observed. In the process, the appointed actuary shall assess the financial situation of
the undertaking, in particular with respect to whether or not the undertaking is in a
position to fulfill its liabilities under the insurance contracts at all times and whether it
disposes of adequate resources in the amount of the solvency margin.
2. The appointed actuary shall certify at the end of the balance sheet that the ageing
provision has been calculated in accordance with no. 1 above (actuarial certification).
This does not apply to small mutual associations (section 53 (1) sentence 1).
Section 11a (3) no. 3 and (4) no. 1 apply accordingly.
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