Occupational disability insurance: half-empty or half-full

Concrete or abstract reference – or both?


Any such general distinctions in occupational disability insurance (BU) are ultimately not conducive to classifying concrete insurance conditions according to them. However, there can be transitions, theoretically e.g. in the case of an initial inspection different from that of a subsequent inspection.

And no one forbids the BU from having, for example from the umpteenth BU year onwards, a possibility of abstract references in concrete terms and conditions, or, if necessary, even later, a reference to each professional activity. Only with certain restrictions will concrete insurance conditions be subsumed under terms such as concrete and abstract reference.

There are essentially no standards that restrict the freedom to set tariffs with all the nuances. So the only thing that helps is to read and understand the conditions carefully.

The OLG Karlsruhe (ruling of 17.05.2011, file no. 12 U 45/11) decided “The modalities of an admissible referral in occupational disability insurance are determined by the insurance conditions agreed in each case and can therefore vary depending on the set of conditions.


Concept of occupational disability has so far been insufficiently defined

Section 172 of the Insurance Contract Act (VVG) contains a (partial) definition of occupational disability and occupational disability insurance – supplemented by the insurers’ terms and conditions (VR). According to this, a BU is also already at 10%. However, the insurer may deviate from this and set the limit at 20, 50, 70 or 100 %. Contrary to § 172 III VVG, it is possible to refer to any activity without maintaining the life position, in accordance with the conditions: in this case, one has a disability regulation as a form of the BU.

Nowhere does it say that every newly chosen profession must also be insured. §§ Sections 23 and 158 of the VVG do not preclude agreement that only the occupation specified in the application is insured.

It is already questionable whether it makes sense to take out a BU insurance policy which also pays out if the person in question earns more than before, simply because the new profession is less respected or does not match the previous skills. What interest is insured here?

Most of what is written about the BUV is purely descriptive about what is currently seen. If a BoD wanted to, it could offer a BU insurance with conditions that 90% of the texts on the BUV are a waste of time because they are being done differently. In particular, nowhere in the law does it say which services are to be provided. So there is no pension to be paid. Thus, the reduction in income can also be paid in the sense of non-life insurance.

The law allows the BU to be much more flexible than is actually customary in practice with BoDs. In this respect, the writers of BU conditions, like those in Plato’s Parable of the Cave, are only shadows on the wall of what is outside the possible reality that the VVG still wants to grasp. What will be paid (pension, retraining, lump sums, compensation, anything else) is completely open. Nor does it say anywhere that pensions are to be paid for the entire duration of the BU until the end (or expiry of the BU insurance) and in the same amount.


BU design variants unused by insurers

For example, the law allows a daily allowance to be paid for each proven day of incapacity, payable on the day of the BU in arrears on application. Then no pension is paid, which starts at BU and which the BoD must recognize as a pension right, only once for a limited period. Rather, new benefits are always due as long as the BU continues to exist. What is written in the BU conditions today is completely irrelevant, because it can be done completely new, within the framework of VVG. And a proven loss of income can also be assumed.

The percentages of the BU can increase, the benefits can decrease, the possibility of referral can change during the duration of the BU, or at the end after 5 years 70% BU can be requested and count any abstractly referable profession that provides at least 30% of the old income. The VVG does not restrict anything here, not even in the legal provisions on occupational disability insurance.

In the case of a specific referral, the obligation to perform may be terminated if the UN, contrary to good faith, refuses to engage in a reasonable professional activity: Either already under applicable law and usual conditions, or by a new clause. In this case, the UN is not referred to in the abstract, but damages are offset because it does not take up a concrete possible professional activity without sufficient reasons.


Hybrid forms between concrete and abstract reference

The OLG Nuremberg (judgement of 23.01.2012, Az. 8 U 607/11) stated in a BU benefit case “that the conditions in the case of a concrete referral clause do not establish an obligation to accept another activity, so that it is up to the policyholder himself to avoid the possibility of referral; why something else should apply if the policyholder has taken up another activity, but not to an extent corresponding to the previous life position, is not evident.

If the insured person (VP) then simply works 3 hours instead of the objectively possible 8 hours in a possible concrete referral job, the BU pension does not cease to apply. Or she works 8 hours in a job below her previous life position, but with the same income, although objectively she could also be a concrete referral. This means that the income is in fact roughly doubled – even if it is always taxable.

Apparently the insurer would have liked to have had this different in court – but the judge pointed out to him that he could have written this in his conditions, because this is not prohibited. However, in this way he leaves it to the arbitrariness of the insured person to decide whether he must continue to pay benefits to the latter. If he absolutely wants it that way and writes, although he could do it differently, he will also be told by the court.


Example of income optimisation through BU pension:

The following constructed case with the usual concrete referral clauses: Employee of a BoD has a position there with a net income of EUR 3,000. He becomes a BU and receives a BU pension of EUR 2,000. Then it is medically determined that he can carry out a concrete referral activity there with the same income of 3000 EUR, which is also offered to him. Now he admits that he can do this, and offers to voluntarily take up this position at 50% with an income of 1500 EUR, so that he can keep his BU pension and thus have even more net with 3,500 EUR.

Or he applies there full-time for an advertised position that does not correspond to his previous life position in terms of social standing, for example, but also brings in EUR 3,000 net, so that with a BU pension he even has EUR 5,000. He concedes to the reproach that there is a real concrete referral job available for him, which he can objectively exercise just as well, but refuses to do so, for the sole reason that he cannot be forced to do so according to the insurance conditions and would then lose his occupational disability pension, which is why – as a reason – he rejects this. In addition, he tells every colleague that if the AG as a BoD is so stupid as to use such clauses, then he should just pay “twice” – and recommends everyone to take out this insurance and take appropriate action in the event of a claim in order to increase net income, perhaps even in written statements, by describing his case, in a social network.

So why do VR actually use such clauses which lead to the above mentioned result as OLG Nürnberg?


OLG Nuremberg refers insurers to their own design options

The OLG suggests the idea that a BU pension may be omitted for other reasons due to breach of duty (for the actual commencement of an objectively given concrete referral activity):

“To the extent that it is occasionally argued that the policyholder can be treated “in extreme cases” in good faith as if he were actually performing the work that is possible and reasonable for him (Prölls/Martin, loc. cit.), this would not help the defendant either. Such a narrow exceptional case would not at all exist in the present case.”

It is known in professional circles that more often than not it is not lawyers but business people with a focus on marketing who write down the insurance conditions. VR who use such clauses must be asked whether they still have all their senses together, or in Bavaria “Hots di anpockt? What they allow here is “legal insurance fraud”. No one is forcing them to make such extreme concrete referral clauses. In doing so, they surrender themselves to the arbitrariness of the insured, who in their previous concretely practised profession will one day become a BU and only remain in it.


Unimaginative consultants and board members harm shareholders

Mockers among the brokers then fabricate stories about “stupid” boards of directors whose executive boards and consulting firms do not exhaust the legal possibilities of product design.

If necessary, the question of liability for those who have drawn up the GTC as employees or who have accepted them without criticism, as well as external law firms advising on product development, may also arise.

Apparently, there is a gap between what contracts actually stipulate and what BoDs imagine or wish they would contain, and this is then settled in court, with further fees for the above-mentioned law firms. There VR is then surprised when the judge explains to them what they are supposed to have laid down in their conditions. Whether they then learn something new or dismiss this as a misjudgement is questionable, because such cases occur again and again.

The high requirements of the courts for transparent, effectively formulated insurance conditions are rarely met. The higher courts then punish refusals of cover. For example, if the meaning of the relevant clause is not clear for an average policyholder. Or if the economic disadvantages and burdens of the clause remain unclear. But also when technical terms are used which have different meanings in different legal fields. In the end, the violation of the transparency requirement affects the BoD, and it must nevertheless comply with § 307 BGB.


Federal Court of Justice strengthens legal position of the disabled

“For the assessment of occupational disability, the last activity carried out in healthy days remains decisive even if the insured person initially pursued an activity that was restricted due to suffering after the first occurrence of the insured event.

If a concrete possibility of referral has been agreed, the termination of the settlement activity again constitutes an obligation to pay benefits on the part of the insurer if the insured person is still unable to carry out the activity carried out in healthy days for health reasons” (BGH, ruling of 14 December 2016 – IV ZR 527/15).

It is not difficult to see that this is a result of the formulation of insurance conditions.


Risk diversification through several BU insurances?

There are former board members of DAX companies who had to give up their sailing boat or yacht in order to make ends meet. This was due, for example, to the fact that in various EU countries, including Switzerland, corresponding insurance policies existed, but the burn-out was not recognised, and the (total) annual BU pension of around EUR 250 thousand was not paid at all from the outset. The UN now had three lawyers – none could say which contract law was applicable to which country.


Forgotten BU application

Some UNs apply for BU benefits with documents that do not show the BU. Later on, documents are available which show the BU, but only then, but the UN forgets to apply for a BU pension (again). The first application is therefore correctly rejected, a second application is not available. Then the judge says, “I’m 100% convinced you’re BU, but I’m still gonna have to dismiss your case.”


Without BU application no BU pension

It is correct if BoDs insist that the UN must first submit a proposal for BUs. If he makes an application for BU because of physical damage, and only psychological reasons arise, he must be free not to make an application for BU according to psyche. The first application must be rejected and the second (not submitted) will not be processed. Despite proven BU he gets nothing. Without an application there is no BU pension.


The reason for the BU is also important in review proceedings. It does not help if the BU for back problems is replaced by one for a black eye, because this can be stopped immediately – despite continuing back problems – when the eye is normal again. Another reason could be that – instead of a BU pension – a much higher daily sickness benefit is paid (until further notice) by another BoD as long as no BU pension is granted and no other BU has been objectively proven.


Unauthorized BU services?

Anyone who lies to his BU insurer in good time with persistence of more than 10 years when applying for insurance cover also receives his benefits (BGH, ruling of 25.11.2015 – IV ZR 277/14): Courts have apparently taken VR to their hearts for years?


BU Optimization

Less than one per thousand of the “chamber professions” (e.g. doctors, dentists, tax consultants, notaries, lawyers, accountants, architects) – including so-called specialist lawyers – have a basic knowledge of their pension scheme or chamber, in particular the benefits for occupational disability. The clever “honorary professionals” have it examined actuarially, and then move from Bavaria to northern Germany, for example – because in the case of the BU, some pension schemes “in the north” offer significantly higher benefits. For this purpose it is neither necessary to give up his office in the south, nor to make a move.


by courtesy of


www.experten.de (published in issue 05/2017, pages 68-71)


Link: http://emag.unipush.de/em/24e5cf-ec3862/?utm_source=newsletter&utm_medium=email&utm_campaign=170517-experts+report+05%2F17#page/70

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About the author

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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