by Dr. Johannes Fiala, Lawyer (Munich), Mediator (Univ.), MBA Financial Services (Univ.Wales), MM (Univ.), Certified Financial and Investment Advisor (A.F.A.), Lecturer in Civil Law and Insurance Law (Univ. of Cooperative Education), Banker (www.fiala.de)
“Natural understanding can replace almost any degree of education, but no education can replace natural understanding.” (A. Schoppenhauer)
The case: After a fire damage, the insurer (VR) refuses compensation in the amount of approximately 350,000 euros. The insurer believes that a witness caused the fire. At the same time, the witness had been a “representative” because he had been entrusted with the administration of the insurance contract by the policyholder on his own responsibility. Thus, the policyholder would have to accept the witness’s conduct as being attributable to him, and the VR would be exempt from payment, § 61 VVG.
The ruling: The Federal Court of Justice (BGH) clarified the concept of representative on the part of the policyholder in its ruling of 14.03.2007 (Ref. IV ZR 102/03). The representative of the policyholder may be entrusted with a wide variety of definable business areas, such as the mere administration of the insurance contract. In this case, the policyholder is also responsible for ensuring that the representative fulfils notification and other obligations prior to the occurrence of an insured event (e.g. notification of the limitation of the subjective risk, notification of increases in risk, obligations after the occurrence of an insured event in accordance with § 6 III VVG). However, this does not include the so-called risk management (risk management in the narrow sense): without the transfer of this risk management to the representative, even a deliberate arson cannot be attributed to the MC. The transfer of a definable business area to a representative means that the representative’s conduct may only be attributed to the contracting party in this area.
The litigation risk: In the present decision, the BGH also found that the insured person had been deprived of his right to be heard, Art. 103 GG: The lower court had not dealt with the fact that the witness could not possibly have been an arsonist according to the expert opinion – despite considerable suspicious facts. It should be noted that this judgment does not concern the question of the extent to which an insurer must accept responsibility for the conduct and/or knowledge of its insurance agent. Here the BGH has set much stricter standards to the detriment of the insurers.
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About the author
PhD, MBA, MM
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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