White label policies: Bafin demands more transparency from insurers

White label policies

Financial regulators warn these insurers

Insurers do not always sell their products under their own name, but through partners. It often remains unclear to customers who the insurer is – this can have serious consequences.

The financial regulator Bafin wants to oblige insurers to be more transparent. This will make it easier for insured people to identify which insurer is behind a particular insurance product. This emerges from the draft circular that Bafin published this week.

Specifically, the letter is about so-called white label insurance. These are policies that an insurer sells not under its own name, but under that of a partner. For example, anyone who takes out travel insurance with an airline or warranty insurance in an electronics store will often be offered the product under the name of the airline or retailer – but there is an insurer behind it.

This often only appears in the insurance conditions as a “risk bearer”. However, this could be misleading from the consumer’s point of view, notes Bafin and emphasizes: “At no time should the impression arise that the partner company is itself the insurer.”

In the future, insurers should make it clear in the general insurance conditions as well as in the insurance application and insurance certificate who the insurer is behind the respective product. If insurers want to continue using the term risk carrier in the future, they must explain what is meant by it.

In the opinion of Bafin, ambiguous role descriptions such as “cooperation partner” or “insurance partner” are also not sufficient. Insurers are not allowed to hide the relevant information in footnotes or small print, but must clearly highlight it.

The move by the financial regulator may have been influenced due to the insolvency of the insurer Element last year. The Berlin company did not sell its insurance under its own name, but under the names of numerous partners, for example Hepster, Friday or Manufaktur Augsburg.

Finally, as an element in early 2025 insolvency registered and stopped the insurance business, many insured people suddenly found themselves without insurance cover. However, many people did not notice this because they assumed that they were not insured with Element, but with the respective partner company.

Bafin wants to prevent such a situation in the future and has announced that it will closely monitor the implementation of the transparency requirement.