From the case law - termination of a death benefit insurance in insolvency proceedings

The opening of insolvency proceedings on the assets of the policyholder of a death benefit insurance raises some legal problems. Above all, the question of the terminability of a death benefit insurance policy that is basically protected against seizure has not yet been clarified by the higher courts.

A death benefit insurance is usually a small capital-forming life insurance whose payout amount is planned for the payment of funeral expenses. The problem under insolvency law is that the insurance sum paid out is usually not contractually earmarked for the event of occurrence (i.e. the death of the person to be insured). Problems regularly arise here in the event of insolvency.

In the case led by our partner, Dr Martin Linsenbarth, as insolvency administrator, the Erfurt Local Court ruled in its judgment of 24 February 2021 (Ref.: 5 C 2091/19) that a death benefit insurance policy with an insurance sum exceeding the maximum limit of § 850b I No. 4 ZPO can be terminated by the insolvency administrator and the surrender value can be partially drawn to the estate.

The law links the question of attachability to the amount of the sum insured and not to the amount of the achieved surrender value. If the surrender value exceeds € 3,579.00, the contract must be divided into an attachable and a non-attachable part. Ultimately, the debtor is to be placed in the same position as if he had concluded a contract with a sum insured of € 3,579.00 in the first place. The Erfurt District Court divided the surrender value in the ratio of the actual sum insured (€ 9,321.00) to the maximum protected sum insured (€ 3,579.00). It concluded from this that only 38.4 % of the surrender value was to be saved and the other part of the surrender value could be taken to the estate.

The present judgement consistently implements the case law of the Federal Supreme Court (judgement of 03.12.2009, ref.: IX ZB 139/07) and can be taken as a blueprint for future decisions according to § 850b ZPO. The appellant withdrew the appeal proceedings conducted at the Regional Court of Erfurt under file no.: 1 S 31/21 after the reference decision, in which the chamber unanimously agreed with the opinion of the Local Court.

With effect from 01.01.2022, the protective amount of section 850b I no. 4 ZPO will incidentally be increased to € 5,400 by the Act to Improve the Protection of Bailiffs (BGBl. 2021 I 850).