Annoyance of the insurance intermediary: insurer rejects a customer

An insurance agent gets annoyed when “his” insurance company rejects a client’s application. A lot of work – no commission.

Then the question of compulsory acceptance / compulsory contracting arises – can the intermediary or the customer force the insurer to accept the application?

Principle:

A compulsion to conclude a contract can always be assumed if there is no real competition on a market, but existentially necessary services are offered (transport, energy, medicine, basic foodstuffs).

Legal obligation to conclude a contract:

Only in very few cases is there a compulsory conclusion for the insurer. For example, the compulsory insurance law (§ 5 PflVG) regulates the compulsory acceptance of motor vehicle liability insurance. However, the insurer must in principle accept the application for motor vehicle liability insurance up to the statutory minimum amounts of cover.
However, the following are excluded (reasons for refusal): Factual or local restrictions (e.g. the insurer only insures regionally or only civil servants). The applicant was already with this insurance company and it was cancelled due to non-payment of premiums or on the occasion of a claim.
The policyholder had violated pre-contractual duties of disclosure. There is a case of non-payment of the initial premium with notice of withdrawal.
The contract was challenged on the grounds of fraudulent misrepresentation or threat. It is conceivable that the insurer will propose a different offer on the basis of its corporate tariff.

Birth of a child in PKV:

In the case of newborns, insurance cover begins immediately after birth if – on the day of birth, one parent has been insured with the insurer under the private health insurance scheme for at least 3 months, the application for insurance is made at the latest 2 months after the day of birth, with retroactive effect from the first of the month of birth, and the insurance cover of the newborn is not higher or more comprehensive than that of an insured parent. In the case of children’s co-insurance, if the above conditions are met, the insurer is obliged to contract, i.e. the insurance application is accepted without benefit exclusions or risk surcharges. In addition, the general and special waiting periods are waived for the newborn.

Statutory health insurance:

In this sense, the GKV is not a (real) insurance, but a pay-as-you-go health care system, because an individual risk assessment by an insurer does not take place here. The health insurance funds are legally obliged to accept every applicant (obligation to contract). The GKV does not charge premiums, but contributions – in return, the GKV member is entitled to medical services.

Contractual obligation to contract:

Some professional associations have agreed with insurers that their members will always be covered. For example, Deutsche Ärzte-Versicherung has undertaken to insure all members of a state medical association against professional liability risks. Here, too, one speaks of the so-called “obligation to contract”, which guarantees all chamber members sufficient professional liability protection.

Compensation for the intermediary:

The regional court Stuttgart decided by judgement of 21.06.2005 (AZ: 32 O 170/04):

A life insurer acts in breach of duty and must pay damages if it arbitrarily rejects applications that an agent had arranged during the notice period.

In the case in dispute, the insurer had terminated the multi-agency contractual relationship of a structural distributor and its sub-agents with due notice. The insurer had already declared with the ordinary termination that it would no longer accept any further applications from the sales company and its representatives. The insurer rejected the claims subsequently filed in a blanket manner without explanation. This was judged by the district court to be arbitrary conduct on the part of the insurer and the agent was awarded his commission as damages.

Review Acceptance Policy:

The intermediary is therefore well advised to inform himself about the acceptance policy: Reputable insurers say, “We’d rather put a risk through its paces right away than have the hassle of a claim later on”. Other insurers prefer to go to court in the event of a claim – typically, occupational disability insurance in particular is a field in which the lawyer rarely seems to run out of work.

*by Johannes Fiala, Lawyer (Munich), M.B.A. (Univ.Wales), M.M. (Univ.), Certified Financial and Investment Advisor (A.F.A.), EC Expert (C.I.F.E.), Banker (www.fiala.de)

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About the author

Dr. Johannes Fiala Dr. Johannes Fiala

Dr. Johannes Fiala has been working for more than 25 years as a lawyer and attorney with his own law firm in Munich. He is intensively involved in real estate, financial law, tax and insurance law. The numerous stages of his professional career enable him to provide his clients with comprehensive advice and to act as a lawyer in the event of disputes.
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