The new Insurance Contracts Law in Germany

The new German Insurance Contracts Law (Versicherungsvertragsgesetz – VVG) mirrors the result of a long anticipated reform work in the area of insurance contract law. It contains several breakthrough innovative provisions which overall constitute a, more than ever before, insured-friendly environment. The law is believed to have encapsulated not only the modern commercial and market needs but also important Federal Constitutional Court decisions. With regards to the provisions on life insurance the reform approach followed and the result achieved, were effected so as to reflect the large share of life insurance policies in the insurance market arena. Overall, it remains to be seen in practice what the actual results will be. Although at first glance the reform appears to be, on the one hand radical and severe on the insurer’s side, while being friendly and favourable to the insured on the other, it is nevertheless thought that it will generally benefit the insurance industry market arena. The changes are discussed by Dr Kyriaki Noussia, presently Alexander von Humboldt Research Fellow at the Law Faculty of the University of Hamburg, Germany.