“What are the implications of the forthcoming Financial Intermediaries Regulations for intermediaries’ VSHA cover?”
In § 9 paragraph 2 of the forthcoming FinVermV, reference is made to § 9 paragraphs 2 to 5 of the Insurance Mediation Ordinance. This currently means the following for the amount of insurance cover: “The minimum sum insured is 1,130,000 euros for each insured event and 1,700,000 euros for all insured events in a year”. According to the legislator’s estimate, the “bancassurance intermediary” will incur costs of between EUR 800 and EUR 1,200 for such cover.
The biggest problem is that this (similar to insurance intermediaries or tax advisors) does not protect the consumer against criminal behaviour or gross breach of professional duties (so-called knowing breaches of duty), because in such constellations the compulsory insurance does not provide any insurance cover. The FinVermV, together with the associated law “for grey market regulation” (law for the amendment of the financial investment intermediary and asset investment law), will lead to a further thinning out of the “free” intermediary community, and thus to further market concentration.
If you want to be better insured as a financial intermediary, i.e. you want to avoid some gaps in coverage, you will have to look for supplementary insurance coverage. In addition, it is to be expected that clients – in the knowledge of the VSH cover – will increasingly try to sue the financial intermediary in the event of incorrect advice.
Dr. Johannes Fiala
(DHBW Newsletter 11/2011, 3)
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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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