Insurance law practical – Is a broker allowed to pay back commission to his client?

At this point, attorney at law Dr. Johannes
Fiala,, lecturer for insurance law at DHBW Heidenheim, your questions. You can ask questions by sending an e-mail

The insurance broker has a duty in the interest of his client, the  policyholder, to (1) investigate risk, (2) examine property, (3) place risk, and (4) inform his client. Because it is commercial practice, the broker is paid by the insurance company or, say, through a pool under a contractual tie-up.

The remuneration of insurance brokers is in a state of upheaval since the ruling of the Administrative Court (VG) Frankfurt am Main (dated 24.10.2011, Az.
9 K 105/11.F), the ban on commission payments was de facto lifted. Increasingly, there are – in addition to net rates – “cash-back brokers”, where clients are sometimes reimbursed more than 90 % of the brokerage or commission. Net tariffs simplify administration for the insurer because, for example, he has no cancellation reserves.
and prepare accounts. The importance of connectivity is decreasing.
The future Article 24 of the EU MiFID Directive (Market in Financial Instruments Directive) is intended to prohibit, as of 2014, free independent
Intermediaries receive remuneration from third parties (initiator, bank, insurance company, other financial house, pool) “behind the customer’s back” including
Kick-backs, which have already been judicially assessed as embezzlement or fraud.
For many customers, advice is apparently not worth what it used to cost. Customers are increasingly interested in attractive products from abroad, especially those that brokers are not allowed to broker.
Fee-based investment advice in accordance with the MiFID II Directive is laid down in § 34 h GewO. Another trend is asset management and financial services without licensing, without financial supervision and without brokerage links.

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Dr. Johannes Fiala Dr. Johannes Fiala

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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