What are the pitfalls for brokers who cancel insurance contracts?

From the series of newsletters of the DHBW (Baden-Wuerttemberg Cooperative State University) Heidenheim on the topic “Mediation Law in Practice”:

At this point, lawyer Dr. Johannes Fiala, https://www.fiala.de, lecturer for insurance law at the DHBW Heidenheim, will answer your questions,
Your questions. You can ask questions by sending an e-mail to ott@dhbw-heidenheim.de.


The first pitfall is that the content of the power of attorney is not sufficiently clear, i.e. it does not expressly include the power to terminate the contract. If there is a missed deadline, the broker may be liable for the (unnecessary) additional premium or the continued incomplete coverage. A second pitfall is to seek contingent cover or terms and conditions difference cover for (old) contracts that cannot be terminated in time. The broker must also be aware that contracts which cannot be terminated by contract can nevertheless be terminated by law (without notice), for example if the insurer’s financial position deteriorates significantly: this then requires, for example, a balance sheet analysis by the insurer. A third pitfall is not having secured connection coverage prior to termination. The insurance or coverage amount of the customer is occasionally higher than the own VSH. Incidentally, your own VSH will probably not pay a cent if it turns out that the broker had reinsured without a customer order. In addition, the insurer can immediately reject the cancellation by the broker if the broker cancels by fax or e-mail, for example, i.e. does not or cannot present an original power of attorney. Immediately often means (only) within one day.

Dr. Johannes Fiala

(DHBW Newsletter 08/2011)

Courtesy of www.dhbw-heidenheim.de.

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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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