The Federal Court of Justice (BGH, ruling of 14.01.2016, file no. I ZR 107/14) decided that insurance brokers may not settle insurance claims on behalf of insurers (VR). In addition, there are insurance brokers who offer damage assistance to broker colleagues and their insurance customers, or to their own and any policyholders (UN) – recently also as a “damage helper” FinTech app via the Internet.
Claims assistance often legal service
Every insurance broker may accompany his customer in the event of a claim, for example as a writing assistant or secretary to the policyholder. However, this only applies if the case is “uncontested”, i.e. if no complex legal questions arise, such as the degree of (contributory) fault after a traffic accident. It already becomes legally difficult if the broker, when settling the damage “to a men’s shirt worth 58 €”, has to ask himself whether the limitation of the compensation to x times the cleaning price in the cleaning contract would be legally effective – or not.
No claims settlement on behalf of the insurer
Contrary to common practice, the Federal Court of Justice (BGH) has rejected the claims settlement for insurers because the broker, as the policyholder’s trustee, is not allowed to change sides in the event of a claim (conflict of interests). The basis for this is § 4 of the Legal Services Act (RDG). In addition, there is no main service as a broker for the insurer, which means that it cannot be a permitted secondary service, § 5 RDG. Both aspects, each on its own, lead to the invalidity of the order to settle the claim – and, as a double invalidity, also to the invalidity of the power of settlement.
No claims settlement on behalf of policyholders
Damage assistance provided by the broker on behalf of the UN is not seen by courts as a (permitted) ancillary service, because the brokerage profession can also be practised without this activity, because it is not absolutely necessary for the meaningful exercise of the profession. The violation of the RDG regularly leads to nullity, because it is a legal prohibition, § 134 BGB. Only out-of-court settlement of claims is reserved for the insurance consultant. Often, however, judicial assistance is also required, for example for the preservation of evidence to protect the UN from factual changes and loss of evidence.
No fee-based claims assistance for broker colleagues and their clients
Albert Einstein said, “The definition of insanity is to do the same thing over and over again and expect different results”. An isolated ancillary service, and thus prohibited legal advice is also available from the tariff change broker (LG Saarbrücken, judgement of 17.05.2016, Az. 14 O 152/15). According to the courts, the verification and mediation of insurance contracts are typical activities of brokers – but not tariff change advice and claims settlement, provided that the case involves disputed legal issues. The FinTech-App-Schadenshilfe therefore already lacks the non-legal main benefit, so that there can be an additional benefit which may be permitted under the RDG – a defect which also affects brokers, but not only them.
Nonetheless, in the event of damage, the own broker must provide the UN with expert advice and ensure that the damage is properly reported (BGH, ruling of 14.01.2016). The broker may be obliged to safeguard the interests of the UN in the settlement of claims. An additional fee, such as a flat rate and/or profit sharing plus VAT is hardly compatible with this, because the UN has already paid a premium to the BoD for the brokerage service – including a brokerage fee calculated by the BoD.
No violation of EU law
The FinTech app for damage assistance for broker colleagues and their customers reminds us of the saying to the day: “You don’t stand a chance, so use it! Just as insurance consultants would usually act anti-competitively if they were to rely solely on profit sharing. A glance at the pecuniary damage liability policy (VSH) might suffice to see that assistance with damage as an isolated legal service is not even covered by the VSH cover.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.versicherungsbote.de (published on 24.10.2016)
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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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