In a ruling of 13 September 2007 (Case No. 8 U 29/07), the Higher Regional Court of Celle dealt with the advice given to an employee on the continuation modalities of an insurance policy taken out in the context of deferred compensation in the event of a change of employer, in particular a change of tariff area.
Since the appeal was not admitted, the judgment is final. The first instance had ruled in favour of the pension fund. The court ruled that, due to incorrect advice, the employee was entitled to demand that the pension fund continue the annuity insurance contract concluded within the framework of a group insurance contract at the time the contract was taken over by the new employer as well as at the time it was later taken over by the departing employee himself at the original conditions, i.e. in the specific case with the same special group tariff (vicarious liability).
The decision was based on the following facts:
The employer had taken out insurance policies with a pension fund under a group insurance contract in the tariff area U. Due to the tense economic situation of his employer, the plaintiff employee had repeatedly asked the insurance broker about the consequences of a possible change of employer before taking out his insurance policy.
The intermediary replied that nothing would change in terms of content if the new employer continued the insurance; in particular, there would be no changes in the contribution to be paid and the benefits to be provided. Another witness, also inquiring about the consequences of changing employers, reported similar statements made by the intermediary during his counseling session during the same period. The mediator himself, who had had many conversations with employees of various companies, said he had no specific recollection of the conversation with the plaintiff.
There were no records of the conversations. The intermediary admitted, however, that when asked about a change of employer, he regularly said that the contract could be continued on a one-to-one basis with the new employer if the constellation was the same. However, he only pointed out that the amount of the benefits and the premium depended on the tariff agreed in each case if he was specifically asked to do so. This information would have been necessary, however, because the employee clearly had a corresponding need for information, since the intermediary was asked several times by the interested parties about the consequences of a change of employer.
There is therefore a misrepresentation. The Insurer is liable for performance to the extent that the Insurance Agent represented the contents of the insurance to the Insured prior to the conclusion of the contract. The liability first takes effect if the agent positively gives false information about the contents of the insurance (reference to BGH VersR 2001, 1502). However, false information can also consist of an omission if the agent recognises the policyholder’s incorrect ideas, which are recognisable to him, without contradicting them and correctly informing the policyholder (cf. OLG Stuttgart VersR 2004, 1161).
The agent does not have a general duty to give unsolicited advice or instruction. However, if it is evident that the policyholder has a corresponding need for information, e.g. due to obviously incorrect ideas about the scope of the insurance cover, the insurer must inform and instruct on its own initiative (see OLG Koblenz VersR 2007, 482). In this context, vicarious liability is not only applicable if the agent has positively identified an inaccurate idea of the policyholder.
Rather, liability also exists if it was readily apparent to the agent that the policyholder was mistaken about a material contractual point. The agent cannot deliberately turn a blind eye if it should have been obvious to him from the circumstances that the policyholder was mistaken about a material fact of the contract.
In this context, the liability arising from the position of trust can not only reshape the content of a contract, but also establish a contractual relationship for the first time. It is irrelevant here whether the agent is at fault for the false information and whether the insurer would otherwise not have concluded the contract in whole or in part according to its tariff. According to the OLG Celle, the employee was also not guilty of any significant contributory negligence, since the written documents (in particular the insurance conditions and the certificate) were not sufficiently clear with regard to the point in question and the written employee information did not contain any statements on the form of the continuation.
Possible effects of the ruling on insurance brokers
In particular, the effects of the judgment on the broker’s liability must be considered. Since the incorrect advice in the present case was given by an intermediary of the pension fund, the employee concerned is entitled to a claim against the pension fund on the grounds of vicarious liability, i.e. the pension fund must continue the contract on the original terms. It could be much more serious for a broker who gives incorrect advice to employees in this respect. In particular, it must be taken into account that the advice also given to the employee is usually not covered by the financial loss liability insurance of the broker. In many cases, employers and employees pursue different objectives in the context of occupational pension schemes. While employers are usually interested in the lowest possible costs, employees are often particularly interested in flexibility, especially with regard to a possible change of job. Some special tariffs, as well as the frequently used zillmerized tariffs, are contrary to this interest of the employees. Brokers who advise both employers and employees therefore expose themselves to a high (often uninsured) liability risk.
Reprimand of the court for incomprehensible contract documents
It is one of the “sales tricks” of insurance brokers that delicate issues are presented incorrectly or incompletely. As a rule, “forms” are made available for the information of managing directors and/ or employees: The content is then later found to be unclear, non-transparent or incorrect. Deceived or misled employees and employers can usually easily seek recourse against the authors of “sales half-truths.” However, such claims can quickly become time-barred – the employer is often particularly interested in recourse and reorganisation, because he himself is liable in the company pension scheme for much longer, namely 30 years by law.
by Dr. Johannes Fiala and Dipl.-Jurist (Univ.) Thomas Keppel
from www.sachon.de (published in Getränke Industrie 11/2008)
Published in AE Arbeitsrechtliche Entscheidungen, issue 01/2008, pages 7-8
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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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