German consumer associations are taking legal action against Zurich, Allianz, AXA, and LPV Lebensversicherung, in different proceedings that can end before the Federal Court of Justice to clarify whether the use of the clause to cut private pensions is lawful.
It is not yet clear whether the insurers are legally allowed to reduce pensions based on the clause, the consumer association Verbraucherzentrale said in a statement.
Therefore, the associations represented under the umbrella of the Verbraucherzentrale are taking legal action against the insurers, seeking clarification on the matter from the Federal Court of Justice (Bundesgerichtshof), the statement added.
In a statement, Allianz referred to a ruling of the Stuttgart Regional Court (LG) last year dismissing a lawsuit brought by the branch of the consumer association in the state of Baden-Württemberg against Allianz Leben.
The consumer association filed a lawsuit against Allianz Lebensversicherungs for the use of a clause giving the insurance company the option to unilaterally reduce the coefficient to calculate pension payouts on private pensions.
It referred to the use of a specific regulation in the general insurance contract of unit-linked Riester (Rente) pension, Allianz said, adding that the coefficient can be adjusted under certain conditions with the consent of an independent trustee.
Under certain conditions, it is (also) possible to increase the coefficient again, it said. Allianz Leben has carefully examined the legal framework for all product designs, and the rule censured by the consumer association represents a balanced regulation taking all interests into account, including the interests of the insured, it added.
The reduction of the coefficient was also examined by an independent actuarial trustee, confirming that the adjustment was necessary and appropriate. Adjusting the coefficient to calculate pension payouts does not affect guarantee commitments from Allianz Leben, it added.
The case is now being heard at the Stuttgart Higher Regional Court, the consumer association said.
“Whether the case ends up before the Federal Court of Justice at some point depends on the further course of the proceedings at the Higher Regional Court. We cannot file a lawsuit directly with the Federal Court of Justice,” a spokesperson for the association in Baden-Württemberg told IPE.
The consumer association in North-Rhine Westphalia is responsible for the proceedings against Zurich Deutscher Herold, Axa Lebensversicherung and LPV Lebensversicherung.
The consumer association in North Rhine-Westphalia and Finanzwende, an anti-financial lobby association, warned Zurich against using the clause to cut private pensions, and will file a lawsuit if the company does not back down, it said.
Zurich used a clause in a contract giving the possibility to reduce the coefficient to pay pensions in case of lower returns, or life expectancy increases unexpectedly. However, the clause does not provide for an increase in the coefficient to calculate pension changes again in favour of consumers, according to the association.
The Cologne Regional Court deemed the clause invalid, it added.
Zurich declined to comment. AXA Lebensversicherung was not available for comment.