EU Directive:
For years, intermediaries in the financial sector have feared the loss of their professional accreditation or licence due to the advertising of their courses by some training institutions. In doing so, these providers invoke Directive 2002/92/EC on insurance mediation. However, the wording of this Directive, “appropriate knowledge and skills”, does not initially impose any obligation to pass a test of professional competence.
It is still an open question whether a specialist knowledge examination will also be compulsory for professionally experienced and/or commercially trained intermediaries. For future entrants to the profession after the transposition of the EC Directive, it may be that the cherries will hang higher on the tree.
Limits for the legislator, by the Basic Law: In the Apothekerurteil (Federal Constitutional Court of 11 June 1958, BVerfGE 7, 377 et seq.), Article 12 I GG is laid down as a uniform fundamental right of professional freedom. According to this, objective and subjective barriers to admission as well as regulations on the exercise of the profession (three levels) are conceivable. Subjective prerequisites are mainly factors that can be influenced by the person concerned, such as prior education or training.
The decisive factor may be, for example, whether the exercise of the profession would be impossible or improper without the fulfilment of the conditions provided for and whether this would entail damage or danger for the general public. Which professional association will take on the task of working out, in the context of lobbying, what legal limit the constitution sets for the legislator, and what the worst-case scenario could really be for the intermediary already in the profession? So that more clarity prevails in the future and no more deals are made with “the first general uncertainty”.
National Discrimination:
The legislator could certainly impose additional requirements (going beyond the minimum framework of the EC Directive) as part of the implementation of the Directive, for example an examination of expertise. Thus, many a master craftsman was surprised that his training took a long time and that a lot of money had to be spent on it, but that one or the other European foreigner with lower requirements was able to obtain a vocational qualification that allowed him to work in Germany. Chief task for financial entrepreneurs: From an entrepreneurial point of view, qualification makes perfect sense, especially in the field of business administration. By the § 34 d GewO additional costs of up to 5,000 euro per year will come on the free mediator (VSH, administration, chartered accountant, etc.), without one cent more business comes out.
Tutor boss Pedersen describes this aptly: “Whoever is not commercially versed and continues to believe that he can make ends meet with just a little salesmanship and cheerful tariff rates will fail entrepreneurially. However, anyone who lifts their finger once automatically loses their business license and is permanently eliminated from this market. The old trick of running the trade through your wife or grandma won’t work either, because companies won’t be allowed to cooperate with such trick agencies in the future.”
Review of the KWG amendment:
When the 6th KWG amendment was implemented on 01.01.1998, there was also no real “grandfathering”, but only a simplified application procedure, for a §-32 KWG BaFin license. The only relief at that time was the renunciation of the own proof of expertise by examinations.
The decisive factor here was that no market participant should lose its profession already protected by the Basic Law as a result of the new regulation. The jurisprudence of the Constitutional Court forced the legislator to weigh up the interests – interventions had to remain proportionate. What applied to the KWG amendment at the time equally applies to the implementation of the EC Mediation Directive today.
Silent Selection:
For years, experts have seen market participants disappear completely from the market because requirements have changed. The average income of German brokers is said to be mostly less than 50,000 euros – the bursting of the stock market bubble contributed to this, as did increased risks in the market for closed investments, lower commissions, and the abolition of tax privileges in the area of KLV and real estate.
In addition, the insurance companies and customers are making ever more stringent demands, some of which will not be met by intermediaries who are not willing to qualify. Not to be forgotten is the “silent tax increase” by way of a broadening of the assessment base of the statutory health insurance:
Many agents are still unaware that the payouts of private life insurance policies are taken into account in the SHI contributions – without any savings allowance, of course. What happens if the intermediary has so far overlooked this in his sample calculation for the client as well as in his personal business plan for adding value to his own professional activity? Consulting protocol swindle: Successful mediators always work with a consulting protocol, in order not to risk without need, house and yard for lack of documentation in the liability process. Some initiators (deliberately?) mislead intermediaries by advertising a liability-free distribution without a protocol:
This is, of course, sheer nonsense, as a glance at the well-known Bond ruling of the BGH should show any broker. Some training institutes, associations and self-proclaimed gurus offer protocol samples in exchange for expensive contributions – mostly they are written offers and not interview protocols. Forms can provide a grid, a checklist as it were – but they can never replace the personal recording of the course of a conversation. Therefore, for a qualified way of working, a data and wish collection is always connected with the additional conversation data, which interested customers give to the intermediaries.
Two things are required of the mediator by the judge in the liability trial:
1. the description of the conversations, arranged in order, individually and, so to speak, as a report of experience. If damages are only statute-barred after 10 years, then the minutes must still show the exact course of the conversation after 10 years. A merely one-sided reproduction of the instructions given by the intermediary is merely an ineffectual attempt.
2. dates and times, location information, and occasion for conversation also belong in there. Conclusion: Consistent personal qualification, also in the selection of products, product providers and one’s own pecuniary loss liability, help the intermediary to recognize and prevent unqualified fraud more quickly. There is no such thing as a liability-free sales force, nor is there a miracle cure for bad advice through a standard advice protocol.
Intermediaries need to recognise that the opportunity lies not only in rethinking, but above all in thinking ahead. Think of the hare and the hedgehog (www.has-und-igel.de): The boastful hare with the misjudgement of his strength(s), must ultimately succumb to the strategically sovereignly placed hedgehogs. Think and act with foresight like a hedgehog if you want to continue to place yourself confidently in the industry.
*by Johannes Fiala, Attorney at Law (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) and Ralf W. Barth, Property Damage Insurance Broker (www.rwb-finanz.de), Chairman of the Board of the Association for the Protection of Investment and Insurance Brokers (www.vsav.de)
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About the author
Dr. Johannes FialaPhD, 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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