A lack of documentation already leads to courts deciding to the detriment of the insurance broker, even reversing the burden of proof. This problem may still have to be compensated in individual cases by a constantly uncertain witness evidence. A major problem is the so-called secondary burden of proof, which has been required by courts for decades even in the case of incorrect brokerage of capital investments.
If a customer claims that he or she was given incorrect advice or even misunderstood the advice, it is up to the intermediary to explain in concrete terms how he or she gave the advice – and why he or she could be sure that the customer had understood it correctly.
Lack of documentation as a double liability trap
This is the case when the UN simply did not understand the correct advice, overheard something, perhaps misunderstood or forgotten. However, the documentation would then have enabled the UN to re-examine the reasons after the oral consultation, which would have saved it from making a wrong decision. Since this is based on the breach of duty that the documentation was not prepared, liability for the damage caused by the conclusion of the contract is frequently raised – despite even objectively verifiably correct “oral” advice.
Despite correct advice, lack of documentation leads to liability
This is exacerbated by the fact that the UN’s waiver of documentation (or even advice) can hardly have any effect on a third party included in the scope of protection – especially if the broker had agreed to provide even minimal advice. It probably won’t help to first garnish the pizza with rat poison and then say: “I wouldn’t eat this pizza because I think it’s unhealthy!” And if the customer says “Yes, my, what’s wrong?” to indicate that he didn’t understand: “Eat the pizza slowly – it’s hot!”
The documentation not only serves as proof of the (correct) advice – but also to avoid a wrong decision in view of the complex matter, which would have been noticed in time in the case of documentation: Thus, the damage is directly attributable only to a violation of the duty of documentation, for which the broker is then liable despite otherwise correct verbal advice. The customer’s misunderstanding is sometimes intentional – so that the customer decides on a product without a feeling of risk.
Therefore, the legislator demands that everything be given to the UN in text form, because it should not rely on its memory. In the liability process, the UN only explains what should have been in the documentation and that it would not have made the mistake because it would have recognized it calmly when looking through the documentation but overlooked it during the oral consultation. The fixation on verbal consultation as a substitute for documentation proves to be an aberration. According to the motto: He did not get a written accusation or a verdict as to why we hung him, but we have witnesses that we explained it to him, and he had the opportunity to speak, before and after the verdict.
Legal error of the insurance industry about the will of the EU legislator?
The intermediary has
“and to state the reasons for any advice given on a particular insurance. He must document this, taking into account the complexity of the insurance contract offered, in accordance with § 62 [VVG],
61 VVG: Not only that it deliberated, but also the concrete content with all the reasons. The UN then says (if it receives documentation): “I could not recognize the problem when I read through it – and you cannot ask me to remember every detail of the conversation, because that’s what the documentation is for.
EU regulation of the insurance intermediary is based on the assumption that he exists and is needed, but that the customer must be protected from him. Some insurers or lobbying associations were wrong to believe that the documentation would only serve to assert compensation rights. But this is not the law, §§ 62, 63 VVG. The explanations in the Bundestag printed matter also generally speak of the assertion of rights and of the fact that the documentation for (i.e. before) the conclusion of the contract must be available or available for this purpose, which then also includes a right of revocation.
Daniel Paluka correctly writes in his work “Die Informations-, Beratungs- und Dokumentationspflichten im neuen Recht der Versicherungsvermittler” (Regensburg 2007): “Through documentation, the customer can
- verify that the information he provided was correct and complete,
- supplement or correct its information as necessary,
- The EU wanted good advice to avert damage from the UN, not improved evidence in cases of poor advice when the damage has already occurred. This is like when the judge gives the delinquent his sentence orally and gives reasons for it, and then asks him if there are any comments, and he only gets the written copy in his jacket pocket when he is already sitting on the horse with his hands tied behind his back under the branch with the noose around his neck. For a later rehabilitation procedure, there is still enough time to preserve evidence, even after 400 years, as the Giordano Bruno case has already shown.Insurers’ lobbying leads intermediaries directly into the liability trapThis could make the advisory processes so difficult for most intermediaries that they would have to give up. The documentation obligation is also becoming the cause of increased liability, without any chance of being able to prove correct oral advice. The lack of documentation as a self-permitted work facilitation for intermediaries turns out to be a boomerang. Form consulting documentation with text modules or to tick?“It should be possible to extract the essential discussion and consultation content from the consultation documentation. From the consultation documents submitted by the defendants to the files (Annex K1), on the other hand, it cannot even be inferred how the plaintiff was advised by the defendant’s employee in 1). Only some of the given topics are ticked off, without the content of the discussions or the questions that were clarified being apparent.Anyone who cannot afford private health insurance in old age but would like better health care in old age should note that the basic private health insurance tariff offers roughly the same benefits as the statutory health insurance, and that the costs differ. Information would also need to be provided about the different contribution subsidies of the statutory pension insurance. If, in the decision of the Higher Regional Court of Cologne, a professional journal entitled “Mediators do not have to provide information about the SHI system”, then according to consistent case law the exact opposite is true if a corresponding need for advice becomes apparent.
- In this ruling of the Higher Regional Court of Hamm, numerous obligations to provide advice when changing from statutory to private health insurance are addressed, such as income in old age in order to still be able to afford private health insurance, the dependence of the contribution amount in private health insurance – also over the course of the contract, the income-independent contributions, also in the basic private health insurance tariff. Reference should also have been made to the necessary consumption of assets (except for the bona fide assets) as a prerequisite for halving the premium in the basic tariff (§ 12.1c VAG) and the concept of need of assistance within the meaning of SGB II or XII.
- The OLG Hamm (judgement of 24.06.2015, Az. I-20 U 116/13) explained among other things
- It is clear that insurers can hardly live with it if the verbal consultation is only a preliminary meeting to prepare a written, well-founded basis for a decision. Consequence: If the written document contains an error, the intermediary can no longer rely on the fact that he or she gave correct oral advice. The documentation then appears to be the best proof of a misadvice for every customer. The verifiably correct oral consultation no longer cures the faulty documentation, but rather devalues the previously correct consultation itself.
- According to the EU’s conception, the reasons for any advice given are therefore information to be given on paper or data carriers. This is the documentation of the consultation. The EU is only aware of this in writing and before the contract is concluded. The EU has no idea that it depends on the oral consultation and that this is then only documented for third parties (according to the lawyer) for reading for reasons of preservation of evidence. Rather, the EU wants the customer decision itself to be based on written/textual information, including documentation.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.experten.de (published on 12.08.2016)
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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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