Court grants compensation for the investing of life insurance policies contrary to contract

Each of the Claimants, a married couple, had concluded with the Defendant a unit-linked life insurance contract including Swiss Select guarantee notes. For these life insurances a conservative investment strategy with equal higher development in value had been stipulated in the contract.

As a result via its asset manager the Defendant invested the premiums that were paid by the Claimants into altogether four different Swiss Select guarantee notes of which the development in value depended on four different funds. It was also invested into guarantee notes of which the development in value depended on index certificates. The guarantee notes were called Swiss Select Guarantee, Swiss Select Guarantee 2, Swiss Select Guarantee 3 and Swiss Select Guarantee 26. According to the insurance company these were conservative and save investments.

Despite the alleged save investments the value of the insurance policies decreased continuously. From the point of view of the Claimants the assets brought into the policies by them had in reality not been invested in line with the concluded contract and therefore had not been invested in a conservative but instead in a highly risky manner and Swiss Select guarantee notes contrary to the assertions of the Defendant did not constitute a save investment at all.

The District Court in its recent decision (10 CG.2010.274) concerning the law suit of the married couple filed by Schwärzler Attorneys at Law decided in favour of the Claimants and by referring to an expert opinion stated that none of the four guarantee notes had consisted of conservative investments that would have given rise to expectations of a continuous development in value at an adequate risk. Rather, as the Court stated, the investments made by the insurance would most probably have led to the complete loss of all premium assets within 10 years. Therefore by investing the premium assets into the above mentioned guarantee notes the investment had not been conservative which was contrary to contract.

Furthermore the Court found it alone contrary to the duties of the Defendant that the accounts of the Claimant had been debited with debit interest. According to the Court the loss in value within the actual time period of five years also showed that it had not been a conservative investment.  

The District Court granted compensation to the two Claimants in the amount of the full interest in the performance of the contract thus the difference between the repurchase value determined by the expert opinion which would have resulted from an investment in line with the contract and the repurchase value actually paid to the Claimants by the Defendant.

Against this decision it has been appealed. This is why the decision is not legally binding yet. 

For further information please contact:

Dr. Matthias Niedermüller


Schwärzler Attorneys at Law

Feldkircherstrasse 15, FL 9494 Schaan

Telephone +423 239 8540

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