Portability of accrued reserves in private health insurance

Private health insurance (PKV) in Germany is a system of lifelong contracts. In the context of such contracts, capital accumulation takes place for all age-groups. When the insured are young, the premiums exceed the costs of the insurer. The savings receive interest, and the survivors of an age-group inherit the savings of their deceased cohorts. The capital stock built up in this way is used to lower the insurance premiums in old age. For some years a discussion has focussed on the fact that an insured person who would like to change his insurance company is not able to take with him his accrued reserves. Many economists see this as a restriction of competition. In an expert opinion of the Ifo Institute for the Federal Ministry of Finance, the shares of accrued reserves that are portable were determined using a model calculation.