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Questions and answers about the Guarantee Fund

Questions & answers


  • What is the Guarantee Fund for Non-life Insurers?

    The Guarantee Fund is a self-governing institution which is regulated by law. The Fund was established in 2003 because the policyholders and injured parties of the non-life insurance company Plus Forsikring A/S suddenly stood without insurance coverage when the company went bankrupt.

     

    With the establishment of the Guarantee Fund, it was particularly ensured that the Fund will step in and provide cover for consumer insurance policy holders in the event of a non-life insurance company’s bankruptcy.

  • Which Non-life Insurers are covered by the Guarantee Fund?

    All members of the Danish Guarantee Fund are covered for their private line insurance policies in Denmark, including non-life insurance companies located in other countries in the EU/EEA that sells non-life insurance in Denmark via a branch or cross-border service provider.

    As of 1 January 2019, The Guarantee Fund only covers claims for policies when they are written in Denmark for risks in Denmark.

    You can view a list of our members here.

  • What is covered by the Guarantee Fund?

    In the event of a member of the Danish Guarantee Fund's bankruptcy, the Fund will cover claims reported by the following:

     

    • Policyholders with private insurances (typically consumer insurances as motor liability insurance, home and personal protection insurance, houseowner’s insurance, second home insurance, accident insurance or similar private insurances)

    • third parties insured against personal injury or damage to property under motor liability policies (regardless of whether they have been taken out for commercial purposes)

    • third parties insured against personal injury under any other liability policies (regardless of whether they have been taken out for commercial purposes)

    • policyholders and those insured under collective insurances to the extent that an insurance corresponds to the individual insurances is covered

    • policyholders with property fire insurances regardless of the type of property and class of policyholders (the purpose of this provision is to ensure indemnification of creditors with a recorded real-property mortgage in case of fire on property on which they hold a mortgage. Therefore, coverage of damage caused by fire is not limited to consumer insurance, i.e. one- or two-family houses or second homes, as the Fund also covers fire damage to commercial properties etc.).


    The Fund covers claims for the above mentioned for insurance policies written in Denmark for risks in Denmark.

    The Fund covers premiums paid before the issue of the bankruptcy order, but with an excess of DKK 1,000 per policy. However, only the premium as corresponds to the remaining part of the insurance period is covered by the Guarantee Fund.

  • Who finances the Guarantee Fund?

    The Guarantee Fund is funded by the members of the Fund i form of entrance fee payments, which are paid upon enrollment to the Fund, and ongoing contributions, which are paid when the Fund's assets fall below DKK 300 million.

     

    According to the Guarantee Fund Act, the Guarantee Fund's assets must amount to DKK 300 million, and contributions are generally paid only when the Guarantee Fund's assets reach less than DKK 300 milion.

     

    The members can collect the contribution from the policyholders via the premiums.

    It is the Danish Financial Supervisory Authority who announces when contributions to the Guarantee Fund are collected and when the contribution obligation ends again.

  • Are there requirements from EU for establishing a Guarantee Fund?

    There is currently no obligation from EU for member states to establish Guarantee Funds. Therefore, policyholders in the EU are covered differently in the event of a non-life insurance company's bankruptcy - depending on the country's local regulations.

     

    The Danish Guarantee Fund has been established to cover policyholders in Denmark if their insurance company goes bankrupt.