No claims settlement through insurance brokers

In the view of VDVM, a current ruling by the BGH will have far-reaching consequences for insurance brokers. Even though it will still be some time before the reasons for the judgement are given, it is becoming apparent that the Federal Court of Justice considers the settlement of claims by insurance brokers to be a violation of the Legal Services Act (RDG), the Association of German Insurance Brokers (Verband Deutscher Versicherungs-Makler e.V.) has announced.


It is not uncommon for insurance brokers to be given the power of attorney by insurers to settle claims, especially for small claims. For example, the insurance broker defendant in the current proceedings was also authorised by an insurer to settle claims suffered by customers of dry cleaners. And the Cologne Chamber of Lawyers took a critical view of this after the insurance broker did not grant a lawyer’s claim for damages in full.

Both the Regional Court of Cologne and the Higher Regional Court (OLG) of Cologne rejected the lawsuit filed by the bar association. The OLG did not allow an appeal. But the bar association defended itself against this with a complaint of non-admission to the Federal Court of Justice. And here she was proved right.

The Federal Court of Justice considers the settlement of claims by insurance brokers to be a violation of the Legal Services Act (RDG), and thus a legal service which cannot be classified as a permitted ancillary service to the insurance broker’s activity. After all, the latter is the policyholder’s trustee, whereas the settlement of claims is carried out on behalf of the insurer. A conflict of interest within the meaning of para. 4 RDG could also not be excluded.

In any case, the lawyers at VDVM express concerns that the decision is compatible with European law. A distinction should certainly also be made in this context between the settlement of claims in relation to the policyholder as opposed to the settlement of claims in relation to third parties (liability cover). Nevertheless, the association recommends its members to be aware of the risk that their claim settlement could be challenged with reference to the BGH ruling.

The problem of the broker acting both as the customer’s trustee and service provider for the insurance company was already discussed by the team of authors Fiala/Schramm in February 2015.


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


by courtesy of (published on 28.01.2016)



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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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