Insurers’ distribution often not in compliance with the law

How insurers have to pay in full in the event of a claim despite incorrectly answered risk questions


Policyholders (UN) can lie to their future insurer (VR) with impunity on risk issues. All you have to do is find an insurer who is stupid enough not to conduct its business in accordance with the law. Such insurers, even larger ones, can then neither declare withdrawal nor, for example, terminate the contract on the grounds of an alleged breach of the duty of disclosure, § 19 of the German Insurance Contract Act (VVG). An alternative to this would be to wait 10 years before submitting the claim for benefits as a UN claim, because then even the challenge of the BoD is excluded (BGH, ruling of 25.11.2015, ref. IV ZR 277/14).


Online sales promotes unpunished customer lies


For years, the usual distribution platforms of insurers – and some brokers – on the Internet have not taken into account that the insurer’s questions must be asked in text form, § 126 b BGB. The application questions must be available to the future UN on a permanent data carrier. In addition, the declaration must be (clearly) legible and the person of the person making the declaration must be named – in the case of questions from the BoD and answers from the (future) UN, we are therefore dealing with two persons to be named by law. Online portals therefore lack the indispensable guarantee that the electronic text (on both sides!) is on a durable medium so that it can be preserved or stored, remains accessible and can be reproduced unchanged. If the legal text form is not complied with, the BoD’s questions are deemed not to have been posed – therefore, the UN’s answers, which are simply lies and lies, are not sanctioned. Insurance brokers could also enter the data online for those customers with whom they had previously agreed a separate brokerage fee for online product brokerage.


Insurers are aware of the risk – the insurance sales force apparently considers it to be low


Some customers are already so ill that they would not find a suitable private health insurance anywhere else. Customers who don’t look good when answering health questions should look for an online VR that puts the health questions online. He should also not send them again later in text form; on the request to confirm the answers again.

Many UN will consider it an unreasonable demand to read everything again thoroughly after the quick online response. Online VR will then realize that UN deliberately let them fall into the trap. And if they change it because of this, it will hinder their FinTech success.

What does someone who orders a pizza salami with mozzarella do when the chef appears and asks “Are you sure you want to eat a pizza salami with mozzarella?


Even stupider insurers rely on the broker questionnaire


The BoD has to ask the questions regarding hazardous circumstances in accordance with § 19 VVG. These are not, however, if the broker provides them on his form. The false answer was then without consequences (OLG Hamm, judgement of 03.11.2010, file no. I-20 U 38/10). The chance of stumbling upon formal errors in court is high. When would a BoD have taken up the broker’s questions, and how would it later prove this – including the instruction about the consequences of a violation of the duty of disclosure, § 19 V 1 VVG?

A general instruction of the insurance broker by the BoD for all present and future cases and UN would also be an unsuitable attempt by the BoD to simplify its work in a way that is not in conformity with the law.

Clever brokers have the door and the gate open to possibly convey any risk to the few stupid insurers.

Even more stupid is probably the practice of less VR to include a broker clause in the policy itself, according to which the (double) nullity of the too comprehensive broker’s power of attorney (with broker’s mandate) is created by legal services (claims settlement, fiduciary broker collection) without approvals, § 134 BGB (see BGH, judgement of 14.01.2016, I ZR 107/14).


Hopeful professors rely on live chat in sales


Many a better vocational school teacher knows that the “insurance value 1914” in residential building insurance is known and understandable only to a few experts for their own objects – in the masses insurance brokers of all kinds have to ensure that the value is determined expertly to avoid underinsurance, § 6 VVG (see OLG Stuttgart, judgement of 30.03.2011, Az. 3 U 192/10). The live chat promises just as little remedy here as when trying to prevent lies on application questions. Questions of application without text form suffer the same fate – as the Pope attributes it to the mass invalid marriages, if the persons concerned do not know what they say – of invalidity.


Download option or download constraint as a solution?


The legislator has specified a precise sequence for mediation, § 62 VVG. Concerning §§ 7-9 VVG, in particular concerning those documents listed in the regulation to § 7 VVG, in any case, with regard to § 62 VVG, no declaration of contract (previously called application for insurance coverage) may be submitted at all in advance.

Fools among lawyers believe that it is a debt to be discharged by the board of directors: in reality, it is irrelevant whether the information of the board of directors together with the documentation of the agent or broker was brought, collected or sent. Rather, the timely receipt by the UN (the jurist speaks of receipt according to § 130 BGB) must be documented at any time before the contractual declaration and must be provable at any time.


For this, however, the online portal of VR would have to use tools such as X-Keystore or other toys of the secret services – because even forced downloads could end up in the temporary memory of the computer, so that they are not permanent, and simply disappear after the computer is shut down.

The SEPA Direct Debit Mandate, which can also be issued in text form, but does not have to meet the requirements of § 19 VVG, is unproblematic. Anyone who is overburdened with this distinction as head of sales should perhaps be allowed to take his hat off immediately?


Even bolder lies some criminal intermediaries


Often the intermediary fills in the application form incorrectly for the customer – occasionally in the case of structured sales combined with skilful imitation of the UN signature. Since a BGH decision of 11 November 1987 (BGHZ 102, 194), the knowledge of his representative at the time of the application is attributed to the board of directors as “eye and ear”, § 166 BGB. With a questionnaire filled out by the intermediary, the BoD cannot prove the UN’s false answer (BGHZ 107, 322). The evidence could at best be presented by the insurance agent as a witness, who claims to have actually read each question, and who also remembers in concrete terms what the UN answer was, and that it was entered in full on the form.

Then follows the trick question at the end of the examination of the witness: “With your brilliant memory, I’m sure you can tell me what you had for lunch – including side dishes?


by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm


with friendly permission of Versicherungbote Verlag

(published on 24.10.2016 in Versicherungsbote, issue 02/2016, page 24-25)

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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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