– When to revoke credit and loan contracts, as well as life, annuity and other insurance policies -.
The Federal Court of Justice (BGH, judgment of 24 April 2013, Case No. IV ZR 23/12) decided when customers of, for example, credit institutions (in particular private banks, savings banks) as well as insurance companies have a claim for cover by the legal expenses insurance (RSV) also for contracts concluded earlier: RSV coverage at the time of the revocation of the contract is sufficient for this.
For those affected, considerable sums are at stake, such as the chance to reduce credit by terminating contracts with a longer remaining term, or, for example, to receive at least the paid-in premiums back from life insurance – which is often more than the benefit on expiry of the contract or premature termination of the contract.
Later legal protection cover is sufficient for revocation
Legal expenses insurers often believe that the contract with you must have existed prior to the conclusion of credit agreements or life insurance contracts in order for an insurance benefit from the RSV to be eligible after a revocation of these contracts. However, the timing is not important.
Claim for difference between premium payment and insurance benefit.
The decisive factor is which breach of duty the RSV customer alleges as facts. If a new RSV is taken out and the revocation or objection does not take place until after the expiry of the usual waiting period of three months, the RSV customer has insurance cover. The RSV has to step in if, after a revocation, the bank or insurance company refuses or does not recognise the legal claim for subsequent payment, because the insured legal protection case has only occurred with this refusal.
Claim for loan redemption without prepayment penalty or reversal of life insurance
From a legal point of view, the decisive factor is that the legal claim to reversal only arises completely anew in terms of time with the revocation or objection. Of course, in the background it must be an omitted or formally insufficient revocation instruction from the time of the conclusion of the contract, e.g. of the life insurance, gladly also far before the time of the existence of the present legal protection insurance. More frequent than the omitted or simply no longer provable revocation instruction by the user is the unsuccessful instruction about this right on the part of, for example, a credit institution or an insurance company. Many users thought that they had been correctly informed about the right of withdrawal, and were or are only taught better by the courts – the consequence in the mass business, especially of insurance companies, is that the right of withdrawal is always incorrect in the same quality on a mass scale. Anything else would be as astonishing as if the author, opening his book, did not find exactly the same misprint in every copy of the edition.
Temporally unlimited exit by revocation
For reasons of consumer protection, the right of withdrawal or objection is in principle “perpetual”. Before it is exercised, it should be checked whether this right legally exists for the contract in question, for example because the information on cancellation was incorrect. In addition, the economic consequences should be assessed by an expert, in particular an actuary or a financial expert, in order to have an overview of the economic consequences.
Bank and insurance contracts often in limbo and still revocable after termination
The Federal Court of Justice (BGH, judgement of 0705.2014, file no. IV ZR 76/11) already ruled that the claim for repayment only arises temporally and legally with the revocation or objection. Only then does the regular limitation period for this payment claim begin. This follows from the law of enrichment, as a reversal of the legally groundless payments for credit installments or insurance premiums, §§ 812 I 1, 818 II Civil Code (BGB) plus of all benefits drawn by the bank or insurer, such as interest income. Determining these benefits in full is, however, demanding and, from experience, almost impossible without an actuarial expert in the case of life and annuity insurance policies.
Offsetting: Market interest rates and value of insurance cover
Anyone who uses capital extended as a loan, or who enjoys insurance cover, must compensate for its value. However, if the customer receives a profit due to the “savings bank lottery” associated with the loan or an insurance benefit after a claim, these benefits may of course be kept – without any offsetting or deduction, since they have already been paid by the customer.
Timely legal protection contract secures part of the costs
Some insurance claims handlers have already pointed out that RSV is not an “all risk” policy. Premiums and benefits can vary quite significantly. This is by no means a “fully comprehensive” cover, as many offers do not include either the remuneration for the usual time spent, or expert appraisal and assistance in the proceedings. Some lawyers, however, also solicit orders on a larger scale by offering the possibility of so-called “litigation financing” at the risk of the litigation financier. Of course, this leads to the fact that the profit must be shared with the latter, which is not necessarily optimal. However, this is definitely better than foregoing an additional payment altogether because of the risk of litigation. So far, there has almost always been a good settlement offer because providers are reluctant to risk judgements in this area, especially if they would have to disclose their calculation in information claims.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.hm-infinity.de (published in issue 05/2018, page 14-15)
www.pt-magazin.de (published 04/30/2018)
www.experten.de (published in ExpertenReport 06/2018, page 60-61)
www.experten.de (published in issue 07/2018, page 52-53)
www.experten.de (published 07/08/2018)
www.handwerke.de (published in May/June 2018 issue, pages 8 – 10)
www.network-karriere.com (published in issue 06/2018, page 30)
www.tabakzeitung.de (published in Issue 19, 2018, page 8)
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About the author
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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