GERMANY Law and Practice Contributed by: Oliver Sieg, Helmut Katschthaler, Philipp Koch and Charlott Kujath, Noerr
Large Risks Insurance The above restrictions do not apply to contracts insur- ing what are known as “Large Risks”, regardless of where they are situated. Large Risks insurance is defined as: • specific types of insurance (eg, transport and marine insurance); or • insurance taken out by policyholders exceeding the limits of at least two of the following criteria: (i) a balance-sheet total of EUR6.2 million; (ii) net turno- ver of EUR12.8 million; or (iii) an average number of employees of 250 during the financial year. In these cases, Article 7 (2) of Rome I determines that the parties may choose the governing law as desired. If the parties fail to make a choice, the law of the coun- try in which the insurer has their habitual residence generally applies. As an exception, the law of another country applies if all circumstances clearly show that it is more closely connected to the contract. Reinsurance Contracts Reinsurance contracts are exempt from both Article 7 of Rome I and from the Insurance Contract Act (VVG). As a result, the parties to a reinsurance contract may freely choose its governing law pursuant to Article 3 of Rome 1. In the absence of a choice of law, the governing law is determined according to Article 4 of Rome I. Either the law of the country of the habitual residence of the party required to effect performance or the law of the country to which the reinsurance has the closest connection will apply. 2.2 Jurisdiction and Forum Selection Restrictions Under the VVG Jurisdiction clauses in insurance contracts governed by German law are subject to strict limitations. The VVG contains a protective framework for policyhold- ers, while the intensity of that protection varies by line of business and category of risk. Section 215 VVG is a mandatory provision contain- ing a policyholder-friendly venue rule: actions arising from the insurance contract may always be brought before the court in whose district the policyholder has their residence (failing that, their habitual residence) or statutory seat. For actions against the policyholder,
that court is exclusively competent. Clauses in general terms and conditions ( Allgemeine Versicherungsbed- ingungen (AVB)) that deviate from this rule to the detri- ment of the policyholder are considered void. Parties may alter jurisdiction only under certain cir- cumstances, in particular: • by express and written agreement concluded after a dispute has arisen; or • by providing the policyholder with additional fora. Large Risk and Reinsurance Contracts Similar to the legal framework governing choice of law, parties to Large Risks insurance contracts and to reinsurance contracts are offered greater autonomy and may choose the place of jurisdiction freely. For that reason, jurisdiction clauses appear most commonly in transport, marine and aviation insurance, which are always treated as Large Risk insurance and reinsurance contracts, as those are exempted from most of the statutory restrictions regarding jurisdic- tion. 2.3 Cross-Border Disputes and Conflicts Issues Brussels I Generally, cross-border insurance disputes in Ger- many are subject to Regulation (EU) 1215/2012, or “Brussels I”, which dedicates its Section 3 specifi- cally to insurance disputes, favouring policyholders and insureds over insurers. In principle, jurisdiction lies with the court in the member state of the defend- ant, defined by their habitual or ordinary residence. A policyholder may also bring proceedings against an EU-based insurer before the courts of their own domi- cile. Co-insurers may be sued in the same court as the leading insurer. For claims brought against an insurer, it is sufficient for the insurer to maintain a branch office in the respective member state. In particular for liability, product liability and immov- able property insurance, the insurer may also be sued at the place where the harmful event occurred or be joined to the proceedings the third party initiated against the policyholder.
128 I NSURANCE L I T IGATI O N 2026
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