How it can succeed almost always the mediator into the adhesion to get …..: Insurance mediators maintain gladly that the fee consultation the future belongs – some insurers offer in addition already a mediation fee agreement, in which the customer commits itself the costs of the switching over 60 monthly rates to abstottern. Although this is effective in principle, a variety of exceptions mean that such fees often do not have to be paid after all……
Insurance intermediary unsuccessfully sues client for brokerage fee
The Regional Court of Wuppertal (judgment of 04.08.2011, ref. 9 S 99/10) dismissed the claim of an insurance intermediary for remuneration for “mediation, advice, information and support”. The court left undecided whether such agreements with the customers could turn out to be usurious or immoral, or also as customer deception with the right to contest. Furthermore, an insurance intermediary can forfeit his brokerage fee if he works for both sides without this having been agreed with the customer in advance: there are insurance intermediaries who demand a brokerage fee from the customer for their work – and yet receive additional remuneration from the insurer “round the back”, without the customer’s knowledge.
Obligations to provide advice on the risks of investment funds in insurance contracts
Investment funds are considered risky investments, so that the customer must be informed about them in detail in an understandable and comprehensive manner. If the customer later alleges an advisory error, the insurance broker has a so-called secondary burden of proof. Then the insurance broker is not helped by general meaningless statements about the advantages and disadvantages of the chosen investment funds. Rather, it depends on the specific content of the conversation.
Insurance broker comes away empty-handed, liable to client for investment losses
Since 2007, one of the core obligations in insurance broking has been to provide the customer with documentation to accompany the advice. These are often pre-formulated text modules or forms to be ticked off – supposedly they are to serve the legal security of the consultation. With the contentwise and temporal expiration of the consulting discussion such documentations have however absolutely nothing to do, as the LG Wuppertal clearly determines, and such a work therefore without further ado completely as not evidentiary aside sweeps.
Such documentation also does not enable the broker to make the “required concrete factual presentation about the manner in which the advice was given”.
The LG Wuppertal stated that in the absence of concrete proof of advice – as has been possible for decades by some experienced brokers by means of a protocol – the proof of the prima facie case speaks in favour of the customer. As a rule, the insurance broker then does not succeed in proving exoneration, so that he is liable to the customer and, moreover, cannot claim any money from the customer under a brokerage fee agreement.
The fairy tale of the legally secure prefabricated structured consultation protocols to be ticked off thus vanishes into thin air. No judge takes it for granted that concrete advice as prefabricated can actually have been given in concrete terms. The consultant is then left empty-handed. What he believed to be legally secure in his hands, the judge did not dignify with a glance.
In particular, the fee and brokerage agreements with deferral and payment by instalments are having a boomerang effect on brokers. Because instead of paying the fees due after termination, the client first allows himself to be sued. As a result of the intermediary’s claim, the customer is driven to the lawyer, who uses all means to reject the intermediary’s claim and even to recover the instalments already paid. Thus, consulting errors are increasingly becoming an issue in court, where customers would otherwise have resigned themselves to losses due to low surrender values after termination and the intermediary would at least have been left with the commission portion earned through the expiry of part of the liability period, entirely without court and lawyer costs and litigation risk.
by Fiala, Johannes and Dipl.-Math. Schramm, Peter A.
by courtesy of
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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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