Court prohibits making it more difficult to change private health insurance tariffs by means of a “tariff structure surcharge

Premium adjustment clause of Allianz Krankenversicherung also invalid?

Penalisation of old customers as tariff switchers through premium surcharge

Since the introduction of the new Aktimed tariffs, Allianz has levied an additional flat-rate surcharge, the so-called tariff structure surcharge, on all switchers from the old tariffs.

This reduced the potential savings of those switching from old Allianz tariffs, who tend to be in poorer health than new customers on Aktimed tariffs.

Switchers had to pay these additional costs on their own after switching via the flat-rate surcharge, which meant that premiums for new customers in the Aktimed tariffs were kept low.

New ruling of the Federal Administrative Court

Allegedly surprising for Allianz, the Federal Administrative Court ruled on 23 June 2010 (AZ.: 8 C 42/09) that this lump-sum surcharge is inadmissible. Allianz then announced that the surcharge would be cancelled and that any surcharges already paid would be refunded.

Premium increase expected for new customers

However, the consequence will now be that the new premiums in the Aktimed tariffs will generally have to be increased in such a way that they compensate for the elimination of the tariff structure surcharges. What is more, there will now be an even greater number of switches from the old tariffs, which are often more expensive because of the poorer risks insured there, to the new tariffs, which will then cause higher costs than currently calculated.

If the flat-rate supplements are now abolished, the benefits financed from them will have to be financed from the general premiums of the new tariffs themselves, which will increase their premium. A new calculation would be possible as early as 01.01.2011. Companies are required to review the need for premium adjustments at least annually and submit this to the Trustee by the end of April.

However, it was probably determined at Allianz from April 2010 onwards, still subject to permissible tariff structure surcharges, that no premium increases would be necessary in the Aktimed tariffs at the beginning of 2011 – whereupon Allianz gave a premium guarantee for the Aktimed tariffs until 1 January 2012. For existing customers already recruited with it, this can probably not be revoked. However, the adjustments as of 01.01.2012 would then be all the higher.

Are premium increases for existing customers legal?

However, it is legally questionable whether existing customers may be additionally adjusted at all with the justification of the omitted tariff structure surcharges. This is because premium adjustments are made because of increased medical costs and changes in other calculation bases – a rate structure surcharge that is prohibited by the courts could therefore possibly not provide a permissible reason for an additional premium adjustment.

But there is another problem for Allianz – because there are doubts as to whether Allianz’s premium adjustment clause is effective at all – which means that premium adjustments made by Allianz in previous years could also be invalid.

Judicial doubts about the legality of private health insurance premium adjustments

At a hearing on 4 March 2010, the 12th Chamber of the Munich I Regional Court, which specialises in insurance law, expressed the view that many premium adjustments by private health insurers could be invalid.

The basis of the court’s comments was the complaint of an insurance policyholder who had come across a clause in his contract conditions (AVB) which, contrary to a ruling of the Federal Court of Justice from 2004 (Case No. IV ZR 117/02 = NJW 2004, 2679), allowed the premiums in his “observation unit men” to be adjusted even if the “triggering factor” relevant in this respect had exceeded the agreed limit of 10% or 5% only in the “observation unit women”, for example:

„… If the comparison shows a deviation of more than this percentage for at least one observation unit, the tariff premiums of all observation units shall be reviewed and, if necessary, adjusted with the approval of the trustee. If the discrepancy exceeds 5%, the premiums of all the observation units in the rate schedule may be reviewed by the insurer and, to the extent necessary, adjusted with the approval of the trustee. …“.

In fact, his inquiry with the insurer revealed that in 2003 and 2004, the triggering factor exceeded the required limits only in observation units other than the plaintiff’s, and a premium increase was nevertheless made.

Asked about this, the insurer generously offered 377 euros, since a corresponding premium increase would have been made at the latest at the next review.

PKV customer sues for repayment and determination of invalid clause

The insured was not satisfied with this, however, and sued not only for reimbursement of the excess premiums paid in 2001 and 2002 up to the date of service of process as a result of what he considered to be unjustified increases, but also for a declaration of the invalidity of the clause in the insurance conditions which had been amended in the meantime and of the adjustment of conditions.

During the conciliation hearing, the judges indicated that they largely followed the plaintiff’s submission. Thus, according to the preliminary assessment, all premium adjustments between 2001 and 2004 were ineffective because either the triggering factor had exceeded the 10 % limit only in the case of another observation unit or, in the case of the applicant’s observation unit, the triggering factor was only between 5 % and 10 %.

However, in view of the invalidity of the clause, this was not sufficient for a premium increase, as the statutory limit of at least 10% thus applied. This is exactly what the plaintiff had argued. However, the court went further:

The validity of the clause was not only in question because in the old version there was no separation – as required by the BGH – between the observation units, but also because the insurer combined the statutory possibility of agreeing a lower percentage with an optional provision not provided for in the law.

This opens up the possibility for him to do and let do what he wants in an alarming way. For example, with a trigger factor of between 5 and 10%, it could always increase premiums in the event of cost increases, but refrain from reducing premiums in the event of decreases, to the detriment of the insured.

This further reason for the possible inadmissibility of the clause, as seen by the court, now also affects most of the tariffs of Allianz Private Krankenversicherung, since their terms and conditions also contain such an optional provision for a reduced limit of 5% compared to the statutory limit of 10%.

In contrast, insufficient separation between the observation units in the (therefore ineffective) GTCs occurred only occasionally in the industry.

A condition adjustment to 1.01.2005 because of clause inefficacy due to the BGH judgement considered the judges likewise ineffective, since a change of the supreme court iurisdiction does not offer for this a justification, because to the place of the ineffective clause – inclusive – the conditions of the contract are not valid. the 5% limit for the triggering factor – simply kicks the law, which only has a 10% limit.

The proceedings before the Munich Regional Court I finally ended with a settlement, according to which the insurer undertook to pay the amount claimed by its customer and the policyholder acknowledged the amended clause at issue and the current premium as effective with regard to future premium adjustments. The judges had previously pointed out the economic problems associated with a decision.

Claims for repayment by insured persons due to ineffective premium adjustment
Should Allianz have used the optional rule in the past in the event of a deviation of at least 5 % (but less than 10 %) – as may be assumed – any premium adjustment at Allianz would prove to be invalid.

This, of course, could cost Allianz far more than the ban on the tariff structure surcharge. Allianz health insurance policyholders should check the provisions on premium adjustments in the terms and conditions of their policies (including earlier versions) to see whether a sufficient distinction has been made between the units of observation and whether optional provisions have been included.

If this is the case, the insurer should be asked for the amounts of the triggering factors, as only on the basis of these can it be determined whether premium adjustments in the past are possibly ineffective until today, which can be quite often the case.

If there are any indications that premium increases are inadmissible, it is advisable to obtain a legal and actuarial opinion from a lawyer or actuary.

Since the recovery of premiums from inadmissible premium adjustments is a claim for unjust enrichment, this claim, even for much older premium adjustments, does not become time-barred until 10 years after the year in which the excessive premiums were paid at the earliest. Since the deregulation in 1994 until today, the insurers have not succeeded in implementing the legal provisions correctly – the subsequent improvements since the BGH ruling of 2004 have only been imperfect piecemeal measures and most of them were also ineffective.

Thus, health insurers still rely on ineffective premium adjustment clauses in many tariffs and for a large proportion of insured persons, which can further lead to ineffective premium adjustments.

by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm

courtesy of

from www.juraforum.de (published on 30.06.2010)

and

www.pt-magazin.de (published in pt-magazin.de, 12.07.2010)

and

www.handwerke.de (published in Computern im Handwerk, issue 07-08/2010, pages 5-6 under the headline: PKV-Tarifwechsel: Gericht untersagt erschwerung durch “Tarifstrukturzuschlag”)

and

www.handwerkermarkt.de (published on 03.07.2010 under the headline: Court prohibits making it more difficult to change private health insurance tariff to “tariff structure surcharge”)

and

published in Elektropratiker 07/2010

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About the author

Dr. Johannes Fiala
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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