Compensation for expropriated life insurance policies was handled according to the principles set down in the German Federal Acts on the Compensation of the Victims of Persecution by the National Socialist Regime of 1949 and 1953. The state's restitution payments were intended to help place the injured parties on an equal financial footing with non-persecuted persons. The costs of such compensation are borne by the state because the German Federal Government considered itself the legal successor of Nazi Germany; payments are made by the state restitution offices.
These claims involved not only policies directly confiscated by the state, but also those canceled prior to term owing to persecution. The insurance companies assisted in the compensation process in two ways: by helping claimants to find documents on their policies, and by calculating individual compensation figures on behalf of the state.
In accordance with the Luxembourg Agreement of 1952, the Federal Republic of Germany paid several hundred million marks to the Conference on Jewish Material Claims against Germany. This and the additional payments made to Jewish successor organizations were used to settle unreported and heirless claims.