The information below covers the conditions for authorisation and provides a number of details relating to the authorisation procedure. This information is designed to help you prepare your application and compile the documents that need to be submitted for this purpose.

The information below was provided in such a way to ensure that it was as precise and up-to-date as possible at the time of publication of this guidance notice. However, only the legal provisions that are applicable at the time of submission of the application are binding.

Applications for authorisation to pursue life insurance business are to be submitted in writing to: Bundesanstalt für Finanzdienstleistungsaufsicht, Graurheindorfer Str. 108, 53117 Bonn, Germany. The following documents must be submitted together with the application and the following points must be observed:

I. Formation under the German Stock Corporation Act (Aktiengesetz – AktG)

1. Submission of the notarised record of formation (section 23 et seq. of the AktG)

• Articles of association (sections 23 to 27 of the AktG; see II. 3 below)
• First supervisory board (section 30 (1) to section 30 (3) and section 31 of the AktG; see III. 1. a) aa) below)
• First auditor (section 30 (1) of the AktG)

2. Submission of the minutes of the first meeting of the supervisory board, with the appointment of the management board (section 30 (4) of the AktG; see III. 1. a) aa) below)

3. Submission of the formation report (section 32 of the AktG)

4. Submission of the formation audit report by the management board and the supervisory board (section 33 (1) and section 34 of the AktG)

5. Where applicable, submission of the report produced by a court-appointed formation auditor (section 33 (2) to section 33 (5), section 34 and section 35 of the AktG)

6. Submission of an excerpt of the commercial register

The documents are to be submitted as official copies or in notarised form to the Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin).

II. Business plan (section 9 (1) to section 9 (3) of the VAG)

1. Establishment of the undertaking (section 9 (1) second half-sentence of the VAG)

Details of the organisational structure of the undertaking (e.g. in the form of an organisational chart)

2. Territory of the envisaged business operations (section 9 (1) second half-sentence of the VAG)

Details of the registered office and the branches of the undertaking as well as details of the location of the insured risks (see section 57 (3) sentence 2 of the VAG) and thus of the territory of the envisaged business operations.

If there is also the intention to insure risks located outside Germany, an explanation should already be provided at this point as to whether branches are to be established (for more information on the term “branch”, see section 57 (2) of the VAG) and, if so, in which states these branches are to be established and in which states this is not envisaged (for more information on the term “cross-border provision of services”, see section 57 (3) sentence 1 of the VAG).

As regards the business operations envisaged in another Member State of the European Union or in a signatory state to the Agreement on the European Economic Area (Member State or signatory state within the meaning of section 7 no. 22 of the VAG), reference is made to the details/documents specified in section 58 of the VAG (for setting up a branch) and section 59 of the VAG (for the cross-border provision of services) which are to be sent as part of the authorisation procedure. As for the business operations envisaged in third countries – i.e. those which are neither Member States nor signatory states within the meaning of section 7 no. 22 of the VAG – the details/documents specified in section 12 (3) of the VAG should also be submitted as part of the authorisation procedure.

Note:
In accordance with section 10 (1) sentence 2 in conjunction with section 7 no. 22 of the VAG, the authorisation is valid in all EU Member States/EEA signatory states. However, the scope of the business operations may only be expanded to include these states within the scope of freedom of establishment and freedom to provide services in accordance with sections 57 to 59 of the VAG.

3. Articles of association (section 9 (2) no. 1 of the VAG)

Submission of the articles of association with a request for approval, provided they do not relate to general policy conditions. In this respect, please note section 8 (4) sentence 2, section 15 (1), section 33 (1) and section 188 (1) of the VAG; section 23 (1) to section 23 (5), sections 25 to 27, section 95, section 108 (2) and section 108 (4), section 109 (3), section 110 (3), section 179 (1) sentence 2 of the AktG; see also the 1978 annual report of the German Federal Insurance Supervisory Office (Geschäftsbericht des Bundesaufsichtsamtes für das Versicherungswesen – GB BAV) p. 26 part 130, whose contents remain applicable, subject to section 188 of the VAG, new version (as the equivalent legal provision to section 34 of the VAG, old version).

The notarised minutes of the annual general meeting at which the amendments to the articles of association necessary for the pursuit of insurance business were resolved are to be submitted together with the application either as an official copy or in notarised form.

It is also necessary to submit a clearance certificate that relates to the business name and that is issued by the chamber of industry and commerce and, where appropriate, the competent judge in charge of the commercial register.

The submission of information demonstrating that the articles of association are in line with the law may help speed up the approval process.

4. Classes of insurance (section 9 (2) no. 2 of the VAG)

Details of the classes of insurance which are to be provided and information about the risks that are to be covered within an insurance class (section 9 (2) no. 2 first half-sentence of the VAG, also as part of the purpose of the undertaking within the meaning of section 9 (1) second half-sentence of the VAG) indicating the type of insurance cover and its purpose.

For information on the classification of risks according to insurance classes, see Annex 1 to the VAG (life insurance, marriage insurance, birth insurance, variable life insurance, tontines, capital redemption operations, operations relating to the administration of retirement provision schemes, see also section 8 (4) sentence 2 first half-sentence of the VAG). For information on the classification of risks according to insurance classes within the scope of accounting, see Annex 1 Part C of the German Insurance Reporting Regulation (Versicherungsberichterstattungs-Verordnung – BerVersV). The type of insurance cover and information on its purpose should be at least comparable to the classification in Annex 1 Part C of the BerVersV and be described in more detail if possible.

Please state whether you are seeking to conduct primary insurance business exclusively or whether you are seeking to conduct both primary and reinsurance business.
If the insurance business is to be limited to certain groups of persons, where permissible under the German General Equal Treatment Act (Allgemeines Gleichbehandlungsgesetz – AGG), this information is to be provided in addition to the information on the purpose of the undertaking, within the meaning of section 9 (1) second half-sentence of the VAG.

In the area of life insurance, the specialisation requirement is applicable, section 8 (4) sentence 2 first half-sentence of the VAG.

5. Reinsurance and retrocession (section 9 (2) no. 3 of the VAG)

Presentation of the main features of the reinsurance and retrocession, taking into account each individual type of insurance (section 9 (2) no. 2 first half-sentence of the VAG) and a policy overview for each envisaged reinsurance contract.

6. Own funds (section 9 (2) no. 4 of the VAG)

a)
The primary insurance undertaking to be authorised is required, from the moment it is granted authorisation, to have eligible own funds that at least meet the amount required under the minimum capital requirement on the basis of the expected overall volume of business. The basic own funds under section 89 (3) of the VAG in conjunction with section 95 of the VAG must at least be such that eligible basic own funds are available in the amount of the absolute floor of the minimum capital requirement (section 9 (2) no. 4 of the VAG).

b)
The minimum capital requirement is defined in section 122 of the VAG. The absolute floor of the minimum capital requirement for life insurers is €3.7 million (section 1 (2) no. 3 of the German Capital Resources Regulation (Kapitalausstattungsverordnung – KapAusstV).

The solvency capital requirement is to be calculated on the basis of the projected balance sheet and projected profit and loss account to be presented for the first three financial years (see II. 8. below) in accordance with the provisions of the VAG (section 96 et seq. of the VAG). The amount of the minimum eligible own funds to be maintained is to be calculated on the basis of the minimum capital requirement and the solvency capital requirement, whichever is greater.

In the interest of solid initial capital resources for the insurance undertaking to be authorised, BaFin emphasises that it is not sufficient if the own funds merely reach the minimum amount required by law.

In the case of an envisaged portfolio transfer, the portfolios of contracts to be transferred are to be included in the above-mentioned calculations.

c)
An organisation fund (section 9 (2) no. 5 of the VAG; see II.7 below) is to be set up to cover the expenses for the establishment of the administration and the network of agents.

d)
The contribution of the own funds which are necessary to ensure that the primary insurance undertaking has sufficient eligible own funds and the contribution of the organisation fund to an account held by the company are to be documented by means of a confirmation issued by the institution holding the account; this confirmation must state that the contributed amount will be definitively available to the management board for its free disposal (section 37 (1) sentences 2 and 3 of the AktG).

e)
If the undertaking is subject to supplementary supervision because it is part of an insurance group (section 245 et seq. of the VAG) or a financial conglomerate (within the meaning of the German Financial Conglomerates Supervision Act (Finanzkonglomerate-Aufsichtsgesetz – FKAG)), the appropriateness of its own funds must also be documented at group level (section 250 of the VAG) or at the level of the financial conglomerate (sections 17 and 18 of the FKAG).

7. Organisation fund (section 9 (2) no. 5 first and second half-sentence of the VAG)

The undertaking must document the availability of the funds necessary for the establishment of the administration and the network of agents (organisation fund) (section 9 (2) no. 5 first and second half-sentence of the VAG).

The expenses for the establishment of the administration and the network of agents must be estimated. The estimates should cover the entire period of the establishment. As a rule, this will be until the break-even point has been exceeded; however, this period must cover at least the first five financial years.

The underlying assumptions for the estimate must be stated, e.g. the planned administration structure, the channel of distribution, specific groups of policyholders, portfolios to be transferred and other key features.

The information in the estimate must be presented with sufficient detail and substantiated in relation to the individual expenses, in terms of their scope and their amount.

As a rule, the necessary expenses will comprise the expenses for the authorisation and the establishment of the undertaking (excluding commission expenses and other ongoing expenses for the insurance business, since these are to be included in the estimate of the profit and loss accounts for the first three financial years in accordance with section 9 (3) no. 1 of the VAG (see II. 8. below)).

The authorisation expenses include consulting fees and notary’s fees, for instance. Registration costs, publication costs and the associated notary’s fees, on the other hand, are considered part of the formation expenses, which are to be determined in accordance with section 26 of the AktG.

• The expenses for the establishment of the undertaking which are to be specified include the following expenses in particular: expenses for
• office staff and field service personnel, staff development (this includes training and retraining costs),
• product development and product calculation,
• advertising, direct marketing if applicable,
• distribution, particularly a description of the different channels of distribution and the expected production, broken down by channel of distribution,
• processing of applications, portfoliomanagement and the processing of benefit claims,
• accounting,
• IT,
• general administration (e.g. operating and office equipment, consulting costs, purchasing the necessary specialist literature and legal texts),
• appropriate risk management

(This is merely a list of examples.)

The estimate of the above-mentioned expenses should not only include the expenses for the year of authorisation but also those for the establishment years which exceed the other ongoing expenses for insurance business, as listed in the estimate in accordance with section 9 (3) no. 1 of the VAG (see II. 8. below).

The specific amount of the organisation fund depends on the circumstances of the individual case. It is therefore not possible to specify amounts that are generally applicable. Applicants should prepare for the fact that BaFin requires significant security reserves based on its previous experience with new establishments.

The full amount of the organisation fund is to be made available and the “rights to repayment, profit participation and interest must be explicitly waived”. The subscriber for the organisation fund must submit a declaration in this respect to BaFin. It is advisable to include this declaration in the certificate of formation (see I. 1. above).

BaFin is to be provided with proof of contribution of the organisation fund in addition to proof of contribution of the funds necessary to fulfil the own funds requirement (see II. 6. above).

In addition to the examples of expenses listed under II. 7. and II. 8., life insurers must also observe their legal obligation to pay a minimum profit participation to policyholders. The management board must submit the following declaration for this purpose:

“Management board’s declaration of commitment”

“The management board undertakes towards BaFin to ensure that the allocation to the provision for bonuses and rebates corresponds to or exceeds each of the minimum amounts set out in sections 3 to 8 of the German Minimum Allocation Regulation (Mindestzuführungsverordnung – MindZV) in each of the first seven financial years.”

Furthermore, the founders/shareholders must submit the following declaration of commitment. In principle, the declaration is to be submitted by all founders/shareholders. It is to be directed at the newly established company; BaFin is to receive a second copy:

“Declaration of commitment made by the founders or shareholders

We have made an organisation fund totalling €… available to the company. We are hereby renouncing to the rights to repayment of and interest on this amount.

In the first seven financial years (starting with the financial year in which authorisation to conduct business is granted), we undertake, jointly and severally, to reimburse any amounts needed to compensate for a loss for the year that cannot be covered by withdrawals from the organisation fund. This particularly applies to deficits resulting in part or in full from the supervisory requirements regarding the allocation to the provision for bonuses and rebates under sections 3 to 8 of the MindZV.

We also undertake, jointly and severally, at BaFin’s or the company’s request, to pay liquid contributions during the year. This is done in particular to ensure that the company is able to pay and cover technical provisions at any time.”

8. Estimates for the first three financial years (section 9 (3) of the VAG)

a)
Estimates of the balance sheet and the profit and loss account are to be submitted. On the basis of section 9 (3) no. 1 of the VAG, this must cover the first three financial years; it appears, however, that the evaluation and assessment of the estimates regularly require that the applicants submit projected balance sheets and projected profit and loss accounts for the first five financial years that are based on these estimates.

b)
Drawing on the estimates mentioned under a), estimates of the future solvency capital requirement (section 9 (3) no. 2 of the VAG) and of the future minimum capital requirement (section 9 (3) no. 3 of the VAG) for the first three financial years must also be submitted. The calculation method serving as the basis for the estimates is to be indicated for the estimates of the solvency capital requirement and the minimum capital requirement.

c)
In addition, the estimates of the financial resources that are likely to be available in order to cover the technical provisions and to comply with the minimum capital requirement and the solvency capital requirement must be submitted for the first three financial years (section 9 (3) no. 4 of the VAG). This also includes the solvency statements within the meaning of section 74 (1) sentence 1 of the VAG for the first three financial years.

d)
Finally, a plan must be submitted, referring in particular to the estimates of the income and expenses for primary insurance business and ceded and assumed reinsurance business for the first three financial years (section 9 (3) no. 6 of the VAG).

If the estimates indicate that expenses which cannot be covered through the organisation fund will lead to a net loss for the financial year, the undertaking is to be provided, prior to its authorisation, with further financial resources which at least prevent the eligible own funds from shrinking below the (estimated) solvency capital requirement or absolute floor of the minimum capital requirement (see II. 6.).

III. Other preconditions for authorisation

The following must also be submitted:

1. Details of the nature and scope of the business organisation (section 9 (4) no. 1 of the VAG)

The following documents are to be submitted for this purpose:

a) Personnel (section 9 (4) no. 1 (a) of the VAG)

aa)
Management board (senior management), other persons who effectively run the undertaking, supervisory board members, the responsible actuary and any other persons responsible for other key tasks

The management board must consist of at least two members (section 33 (1) and section 188 (1) sentence 1 of the VAG) who must each be qualified (i.e. fit and proper) in accordance with the requirements of section 24 (1) of the VAG. Besides the members of the management board, other persons who effectively run the undertaking (see section 24 (2) sentence 1 of the VAG), the members of the supervisory board, the responsible actuary and any other persons who perform other key tasks must also be fit and proper (section 24 (1) and section 141 (1) sentences 2 to 4 of the VAG).

Under section 9 (4) no. 1 (a) of the VAG, the information that is essential for assessing whether the fit-and-proper requirements are met must be submitted for all of the individuals mentioned above. However, for persons who perform other key tasks – this includes the four key functions prescribed by law (the independent risk control function under section 26 of the VAG, the compliance function under section 29 of the VAG, the internal audit function under section 30 of the VAG and the actuarial function under section 31 of the VAG) – this only applies to the persons responsible in this regard. Moreover, the undertakings may themselves decide whether they perform other key tasks. These may be the divisions to be identified by the undertakings which are of considerable significance for the undertaking’s business operations. If this is the case, the above details are to be submitted for the responsible person. For more information on the specific details to be provided and the documents to be presented in this respect, see the relevant guidance notices on the fitness and properness of the individual persons on BaFin’s website.

As regards the permissibility of multiple senior management positions:
Upon request, BaFin may authorise more than two senior management positions held by a single person in insurance undertakings, Pensionsfonds, insurance holding companies or special purpose insurance vehicles if these are undertakings in the same insurance group or group of companies (section 24 (3) of the VAG). For more details, see the guidance notice on the fitness and properness of members of the senior management under the VAG (“Merkblatt zur fachlichen Eignung und Zuverlässigkeit von Geschäftsleitern gemäß VAG” – only available in German) on BaFin's website.

As regards the permissibility of multiple supervisory board positions and restrictions on positions, reference is made in particular to section 24 (4) of the VAG and section 100 (2) of the AktG. For more details, see the guidance notice on the fitness and properness of members of administrative or supervisory bodies under the VAG (“Merkblatt zur fachlichen Eignung and Zuverlässigkeit von Mitgliedern von Verwaltungs- oder Aufsichtsorganen gemäß VAG” – only available in German) on BaFin's website.

It is also advisable to provide information on the future allocation of competences on the management board.

bb)
Other expert personnel
The undertaking must have other expert personnel (office staff and field service). BaFin must be provided with information on these individuals (number and qualifications). This requirement ultimately results from the obligation to estimate the expenses required for the establishment of the administration and the network of agents under section 9 (2) no. 5 first and second half-sentence of the VAG; this includes the expenses for office staff and field service personnel (including training and retraining costs for existing employees) (in this respect, see item II. 7 above).

cc)
Guarantee asset trustees
Before appointing a guarantee asset trustee (section 128 (1) sentence 1, first alternative of the VAG) and a deputy trustee, which is necessary in order to monitor the guarantee assets, BaFin must be informed of the names of these individuals (section 128 (2) and section 128 (4) sentence 1 of the VAG). For more details, see sections 128 to 130 of the VAG and the information on BaFin's website, particularly BaFin Circular 03/2016 (VA) – guarantee asset trustees for monitoring guarantee assets (“Rundschreiben 03/2016 (VA) - Treuhänder zur Überwachung des Sicherungsvermögens” – only available in German).

b) Enterprise agreements (section 9 (4) no. 1 (b) of the VAG)

Application for authorisation for the enterprise agreements within the meaning of section 9 (4) no. 1 (b) of the VAG that are referred to in sections 291 and 292 of the AktG (see also section 12 (1) sentence 1, third alternative of the VAG; see also Official Bulletin of the BAV (Veröffentlichungen des Bundesaufsichtsamtes für das Versicherungswesen – VerBAV) 2001, 118); the insurance undertaking must maintain a certain decision-making scope of its own).

c) Contracts for the outsourcing of key functions or activities
(section 9 (4) no. 1 (c) of the VAG)

Presentation of contracts for the outsourcing of key functions or activities under section 9 (4) no. 1 (c) of the VAG.

As regards the basic contents of the contracts, reference is made to the provisions in section 32 of the VAG and Article 274 of Commission Delegated Regulation (EU) 2015/35 of 10 October 2014, particularly section 32 (2) sentence 2 and section 32 (4) of the VAG and point (4) of Article 274 of the above-mentioned Regulation. Further details of the contents of the contracts should be agreed with the competent BaFin supervisor. Reference is also made to the applicable announcements made by BaFin regarding the outsourcing of key functions or activities.

d) Business organisation in the broader sense of the term

Details of the general requirements for the business organisation (section 23 of the VAG), remuneration (section 25 of the VAG), risk management (section 26 of the VAG), own risk and solvency assessment (section 27 of the VAG), external ratings (section 28 of the VAG), the internal control system (section 29 of the VAG) and internal audit (section 30 of the VAG).

2. Details of qualifying holdings (section 9 (4) no. 2 of the VAG)

If qualifying holdings (section 7 no. 3 of the VAG) are held in the insurance undertaking, the details stipulated in section 9 (4) no. 2 of the VAG must be provided. As for the details and documents which are necessary for assessing the requirements under section 9 (4) no. 2 (b) in conjunction with section 16 of the VAG, it is advisable to follow the guidance set out in section 9 of the German Holder Control Regulation (Inhaberkontrollverordnung – InhKontrollV). Reference is also made to the applicable announcements made by BaFin regarding the control of qualifying holdings.

3. Close links (section 9 (4) no. 3 of the VAG)

Any close links within the meaning of section 7 no. 7 of the VAG with other natural persons or with undertakings must be indicated.

4. Declaration on the necessity of consulting with the competent authority of another Member State or EEA state (section 9 (5) of the VAG)

It is also necessary to indicate whether the undertaking is
• a subsidiary or sister company of an insurance undertaking, of a CRR credit institution within the meaning of section 1 (3d) sentence 1 of the German Banking Act (Kreditwesengesetz – KWG), of an electronic money institution within the meaning of section 1 (3d) sentence 6 of the KWG or of a securities trading firm within the meaning of section 1 (3d) sentence 4 of the KWG and its parent company or the other sister undertaking is already authorised to carry on business in another Member State or EEA signatory state
or
• controlled by the same natural persons or undertakings that control an insurance undertaking, CRR credit institution, electronic money institution or securities trading firm domiciled in another Member State or EEA signatory state.

If one of these two points is applicable, this is to be explained in further detail by the undertaking concerned.

In this case, BaFin will consult the competent authorities in the other Member States or EEA signatory states before granting authorisation (section 9 (5) sentences 1 and 4 of the VAG). During this consultation, BaFin will exchange certain data and information with the insurance supervisory authorities in the EU/EEA which could be relevant for the authorisation of cross-border/affiliated undertakings. The exchange is based on the decision reached by EIOPA’s Board of Supervisors (EIOPA-BoS-17/013 in conjunction with EIOPA-BoS-17/014).

BaFin expects applicants to provide the required data and information together with their application within the context of the authorisation procedure.

5. Guarantee schemes

Under section 221 (1) of the VAG, undertakings that are authorised to carry on business in insurance classes 19 to 23 in accordance with section 8 (1) or section 67 (1) of the VAG must belong to a guarantee scheme for life insurers. The purpose of the guarantee schemes is to protect the rights of the policyholders, insured persons, beneficiaries and other individuals with rights under the life insurance contracts in question.

As a result of the German Regulation on the Transfer of Tasks and Powers of a Guarantee Scheme for Life Insurance to Protektor Lebensversicherungs-AG (Verordnung über die Übertragung von Aufgaben und Befugnissen eines Sicherungsfonds für die Lebensversicherung an die Protektor Lebensversicherungs-AG) of 11 May 2006, Protektor Lebensversicherungs-AG was granted the tasks and powers of a guarantee scheme for life insurers. In consultation with the Federal Ministry of Justice and Consumer Protection (Bundesministerium der Justiz und für Verbraucherschutz), the Federal Ministry of Finance (Bundesministerium der Finanzen) is responsible for specifying, by means of the German Regulation on the Financing of Guarantee Schemes for Life Insurers (“Verordnung über die Finanzierung des Sicherungsfonds für die Lebensversicherer”) of 18 April 2016, the minimum amount of the guarantee assets, the annual and special contributions and the upper limit for payments per calendar year.

It is advisable to inform the statutory guarantee schemes of any upcoming authorisation to pursue life insurance business during the authorisation procedure.

Please provide evidence that the guarantee scheme has been informed at an early stage and – after authorisation has been granted – please provide evidence of the actual members of the life insurance undertaking in question by providing confirmation of this.

IV. Specific requirements in the case of small insurance undertakings within the meaning of section 211 of the VAG

If the insurance undertaking to be newly authorised is a small insurance undertaking within the meaning of section 211 of the VAG, the following specific requirements apply:

1. Specific requirements under section 212 (3) nos. 1 and 3 of the VAG

The following specific requirements apply:

a)
As regards the documents to be submitted for the business plan within the meaning of section 9 (2) no. 4 of the VAG, details on the own-fund items under section 214 of the VAG which represent the absolute floor of the minimum capital requirement are to be provided in accordance with section 212 (3) no. 1 of the VAG. For small insurance undertakings within the meaning of section 211 of the VAG, solvency and minimum capital requirements are determined in accordance with the provisions of section 213 of the VAG and the regulation issued in accordance with section 217 (1) no. 1 of the VAG.

b)
Details of the nature and scope of the business organisation (see item III. 1. a) and d) above) need only be provided in relation to the senior management, the members of the supervisory board and, where applicable, the responsible actuary (section 212 (3) no. 3 of the VAG).

2. Documents to be presented for review of small insurance undertaking status

In order to be able to make use of the advantages under item IV. 1., it is necessary, under section 211 (1) sentence 3 of the VAG, to submit the declarations and documents referred to in BaFin’s announcement regarding the “procedure for identifying small insurance undertakings within the meaning of section 211 of the VAG, as amended with effect from 1 January 2016 (VAG 2016)” for the purpose of conducting a supervisory review as to whether the insurance undertaking to be newly authorised is a small insurance undertaking within the meaning of section 211 of the VAG; the details regarding gross premium income and the technical provisions must in each case refer to the next five years.

However, upon request, an insurance undertaking which would be considered a small insurance undertaking on the basis of the above-mentioned declarations and documents may not be treated as such under section 211 (4) of the VAG.

Experience has shown, however, that life insurers exceed the critical threshold referred to in section 211 of the VAG within the first five years following authorisation. In the context of granting authorisation, BaFin has so far not found that any life insurers were to be categorised as small insurance undertakings within the meaning of section 211 of the VAG.

V. Further (procedural) information

1. Notification regarding the appointment of an auditor (section 36 of the VAG)

It is advisable to already fulfil the notification requirement under section 36 (1) sentence 1 of the VAG during the authorisation procedure and to inform BaFin of the auditor elected by the company.

2. Submission of the application/commencement of the review

The actual processing/review of the new authorisation begins only once an application for this purpose that has been signed by the authorised representatives of the undertaking making an application has been made available. Before BaFin receives such an application for authorisation, preliminary discussions may be held and only a cursory preliminary assessment can be performed in this context if required; written information cannot be provided at that point in time.

3. Consultation with BaFin before the joint-stock company is founded

Consultation with BaFin is recommended before the joint-stock company is founded, in particular with regard to the following items: II. 3. (articles of association), II. 4. (classes of insurance), II. 6. (own funds), II. 7. (organisation funds), II. 8. (estimates for the first three financial years), III. 1. a) and d) (personnel and business organisation in the broader sense), III. 2. (details of qualifying holdings) and IV. (specific requirements in the case of small insurance undertakings within the meaning of section 211 of the VAG).

4. Consultation with the court of registration

The competent judge in charge of the commercial register should be consulted in advance regarding the registrability of the articles of association, and in particular the business name, and BaFin must be notified of their approval.

5. Submission of draft enterprise agreements and outsourcing agreements

As regards items III. 1. b) (enterprise agreements) and III. 1. c) (contracts for the outsourcing of key functions or activities), it is advisable to promptly submit what you would consider to be the final draft versions of these documents for review to BaFin.

6. Steps to expedite the procedure

During the authorisation procedure, BaFin performs a thorough and comprehensive review of the applicant’s legal and financial situation. The review is designed to determine, in particular, whether they are fit and proper and able to fulfil their future obligations on an ongoing basis.

If there is a change in any circumstances during the authorisation procedure that could be of relevance for the authorisation, an updated version of the application documents must be submitted without undue delay.

The duration of the authorisation procedure mainly depends on how well the application for authorisation has been prepared. In the interest of speeding up the procedure, it is helpful if all of the documents which may be relevant for a preliminary review are submitted in duplicate. The documents may be submitted successively upon completion.

If details regarding specific aspects (e.g. outsourcing, qualifying holdings, close links etc.) are not (yet) available or are irrelevant, please make this clear in your application.

7. Costs of the authorisation procedure

In accordance with the German Regulation on the Imposition of Fees and Allocation of Costs Pursuant to the Act Establishing the Federal Financial Supervisory Authority (Verordnung über die Erhebung von Gebühren und die Umlegung von Kosten nach dem Finanzdienstleistungsaufsichtsgesetz – FinDAGKostV), BaFin will charge a fee in accordance with section 2 (1) in conjunction with the schedule of fees referred to in section 2 of the FinDAGKostV. The amount of the fee is calculated on the basis of section 2 (1) in conjunction with no. 6.2 of the FinDAGKostV and thus amounts to €10,000.

8. BaFin’s reporting and information obligations

In accordance with section 8 (5) of the VAG, BaFin makes publications on the granting of authorisations electronically in accordance with section 318 (3) of the VAG and notifies the European Insurance and Occupational Pensions Authority of this. If this relates to an insurance undertaking subject to guarantee requirements under section 221 of the VAG, BaFin also informs the guarantee scheme (section 8 (5) sentence 2 of the VAG).

Note:
After authorisation to pursue life insurance business has been granted, the undertaking must report the principles for the calculation of premiums and premium reserves, and submit the relevant documents, including actuarial assumptions, mathematical formulas, actual calculations made and statistical evidence used; this applies, with the necessary modifications, to the use of new or amended principles (section 143 of the VAG).