Those who hope that the violation of consultation and documentation obligations as of 22 May 2007 can only result in a fine are mistaken. At best, this applies to breaches of information obligations. However, when it comes to consultation and documentation obligations, the withdrawal of a licence can in fact be threatened.
From 22 May 2007 at the latest, every intermediary must provide the policyholder with the documentation of his advice at least in text form before the contract is concluded. If there are repeated justified complaints to the IHK as the licensing authority or compulsory notifications of the own insurer to the IHK about repeated customer complaints to the insurer (compare paragraphs 80 a, 34 d I GewO) due to insufficient or even missing consulting documentation, the question of reliability is affected. This is a criterion for his admission – and thus also for the withdrawal. It is true that the withdrawal measures taken by the CCI must be proportionate. In the event of a dispute, the path through the courts to obtain approval can be arduous, time-consuming and costly. That prospect alone should be enough of a deterrent. Another way to lose your license is asset forfeiture. Re-licensing can take years – even if an over-indebted person is well on the way to residual debt discharge through private insolvency proceedings. The possibilities – despite compulsory insurance – of falling into asset default are manifold. Errors in the area of consultation and documentation obligations can have a virtually resounding effect, up to the destruction of existence. Inadequate advice is bad in itself. But good documentation does not make bad advice better – on the contrary! It may be that the client thus gets “the best proof of the consulting error” right in his hands in writing. An example would be the well-documented mediation of a Rürup contract for the wife, where the crediting of the Rürup pension in the case of the large widow’s pension (new type) was completely disregarded. Even more frequent is the provision of occupational pension advice to employees – without prior consultation of the employer and/or without the employer’s order. If the employee is then asked to have his boss “sign off on all the documents”, the actual policyholder (employer) is not even aware that he has set up an occupational pension scheme. There has been a complete failure to advise “the right person”. Will the intermediary only discover in the event of a loss that in this case neither the indemnity of his product provider applies nor his own pecuniary loss liability (VSH) offers cover – and that he must bear the loss himself?
Even the lack of sufficient documentation can result in coverage being denied as a “knowing breach of duty” in the VSH terms and conditions. The same category includes yield statements, forecasts, guarantees, deviating from the customer order, ignoring legal commands and prohibitions or standards. A delicacy is the IRR method: a safe way, if the investment does not run, to explore capital investment fraud according to § 264a StGB – without VSH coverage – in more detail. Often, an indemnity from the product provider ceases to apply at the end of the agent’s activity. The intermediary who only notices this when “after years the bAV-tremine has gone up” usually has to pay the damage out of his own pocket. The case is similar if the subsequent liability was overlooked in the case of a change of partners or in one’s own inheritance arrangements: Many a widow has ended up at the social welfare office because a creditor had seized the economic basis of her old-age pension. For the intermediary, having his own archive is also becoming essential for survival – not least in the direction of his own product suppliers. In the event of liability, it may become important whether he was incorrectly (e.g. incompletely) trained by the product provider (fault for instructions) or whether the consulting software provided was suitable at all. It is even better to check their suitability at an early stage – and not only in the event of damage, when the software can usually no longer be called up or found.
Avoidance of liability cases primary goal
However, the primary goal must not be to mitigate damages, but rather to avoid liability. The question of what it “costs” when a mistake happens is secondary and belongs in the realm of one’s own risk provisioning. First of all, it is crucial that one’s own consulting and documentation process is consistently implemented in a legally compliant manner. It would be a mistake to think that this is only an issue from 22 May 2007.
Dr. Johannes Fiala, lawyer and certified financial and investment advisor in Munich
(Versicherungsmagazin 4/2007, 56)
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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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