Questions and answers about the Guarantee Fund

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.

The Guarantee Fund has been expanded to handle the portfolio of industrial injury insurance, when a non-life insurance or life insurance company has its license to write industrial injury insurance business revoked or goes into bankruptcy.

All members of the Danish Guarantee Fund are covered for their private line and industrial injury insurance policies in Denmark, including non-life insurance companies with their head office in the EU/EEA that sells non-life insurance or industrial injury insurance in Denmark by establishment of a branch or by freedom to provide services.

Since 1 July 2023 Danish life insurance companies that carry out industrial injury insurance business in Denmark and life insurance companies with their head office in the EU/EEA that carry out industrial injury insurance business in Denmark by establishment of a branch or by freedom to provide services, must be members of the Danish Guarantee Fund and as of result also covered for their industrial injury insurance policies in Denmark.

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.

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 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.

The Guarantee Fund is funded by the members of the Fund i form of entrance fee payments, which are paid upon enrolment to the Fund, and ongoing contributions, which are paid when the Fund's assets fall below DKK 500 million.

According to the Guarantee Fund Act, the Guarantee Fund's assets must amount to DKK 500 million, and contributions are generally paid only when the Guarantee Fund's assets reach less than DKK 500 million.

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.

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.