Under section 31 of the German Insurance Contract Act ("VVG") the policyholder has to provide information to the insurer, but only insofar as the insurer has requested such information. The Court of Appeals of Frankfurt has made an exception to this principle by holding that a policyholder has to provide information even without an insurer's request if the insurer's interest in the information is obvious to everyone and the importance of the information to the insurer is evident to the policyholder.
In this case the policyholder had been informed about the fact that, due to its personal bankruptcy, any potential payment made by a third party to the policyholder would not fulfil the respective obligations intended to be fulfilled and the third party would therefore have to pay the respective amount once more to the trustee. Despite this, the policyholder did not inform its insurer about the prohibition of disposition. Due to the risk for the insurer of having to make the payment twice, the court made an exception to the principle that a policyholder has to provide information to its insurer only insofar as the insurer has requested such information.
Court of Appeals of Frankfurt am Main,
9 November 2010