The German financial supervisory authority is also responsible for the local pension funds.
(Photo: Reuters)
Munich The supervisors of the Bafin have revoked the license for the pension fund of the tax advisory profession to operate the insurance business. The company was unable to meet the minimum capital requirement and presented a financing plan to eliminate this underfunding, which Bafin considered insufficient, according to the Bonn authority.
The pension fund for the tax consulting professions is thus also formally in the process of being wound up. The Bonn company’s financial problems have been known for years. With a total of 4411 pensioners and 3652 pensioners (as of the end of 2020), Deutsche Steuerberater-Versicherung is one of the small pension funds in the country.
However, the withdrawal of the business license has no effect on the existing insurance contracts, it said on Friday. The pension fund will fulfill this with all contractual rights and obligations over the entire contract period and thus normally until the end of the life of the insured person or their surviving dependents, it said.
The pension fund for the tax advisory profession has not accepted any new insured since October 2018. Even later, a possible opening for new customers no longer played a role, according to the company. The pension fund does not need any new business in order to ensure ongoing benefits for pensioners and prospective employees, since the existing contracts are funded and not dependent on any new business.
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Unsuccessful rehabilitation
In 2019, the Deutsche Steuerberater-Versicherung developed a restructuring concept that provided for the reduction of insurance benefits. This step had become necessary because the pension fund does not have a sponsoring company and is not protected by the statutory security fund for life insurers or by Protektor life insurance. So no fresh money could be expected from outside.
In February 2020, however, the Bafin revoked the license to conduct business. However, the revocation had not become final because the German tax consultant insurance had initially lodged an objection to the decision and later sued. However, the Board of Management of the pension fund recently decided not to pursue the lawsuit against the revocation. The legal situation seemed too hopeless.
Many problems in the industry
The case of Deutsche Steuerberater-Versicherung is not the first of its kind. The difficult financial situation of a number of pension funds has been known for years. Above all, the low interest rates of the central banks, which have persisted for years, have led to the financial difficulties, they say. As early as 2018, Frank Grund, head of insurance supervision, sent an unusually direct wake-up call to the industry: 45 of the 136 German pension funds at the time were under “intensified observation”, it was said at the time.
In many places, the situation has not improved since then. About a year ago, the supervisors finally closed the Cologne pension fund and its subsidiary, the Caritas pension fund.
More: Fewer guarantees, more risk – How life insurers reinvent themselves in times of need.