*by Johannes Fiala, Lawyer (Munich), M.B.A. (Univ.Wales), M.M. (Univ.), Certified Financial and Investment Advisor (A.F.A.), EC Expert (C.I.F.E.), Banker (www.fiala.de)
The financial manager Erhard Straub refers to his very good experience with DCM Deutsche betriebliche Altersvorsorge AG: In his opinion, the intermediary should also point out in the cooperation with StB, RA and WP that a “de-liability” becomes easier for all parties involved by regularly checking the commitments.
A selling offerer of the ?DCM German operational age precaution AG? writes: ? with large astonishment we have this morning your contribution in o.g. Pressedienst [experten .de] read. The article gives the impression that a PZ cannot be structured in an insolvency-proof manner. As a lawyer, it should not have escaped your attention that the ruling refers to a revocable pledge, whereas in practice irrevocable pledge statements have been common for many years. These are of course protected from insolvency. We would very much appreciate it if you could correct the unnecessary confusion and anxiety of brokers and intermediaries that this has instigated by an addendum. ??
These comments by the bAV sales manager require the following clarification: 1. error:
It is simply incorrect that the pension commitment of a GGF is protected against insolvency. This is also shown by a judgement handed down one and a half years ago by the LG Erfurt (Case No. 3 O 660/03). In the case decided, the insolvency administrator (as a creditor of the former GGF) had first of all sued the GGF and obtained default judgments because, in the opinion of the insolvency administrator, the GGF had made excessive withdrawals. With this enforcement order (judgment) in hand, the insolvency administrator seized the pension reinsurance policy ? the insurer was ordered by the LG to pay out to the insolvency administrator. The appeal was later withdrawn after it had been lodged, which means that the case has been decided with legal finality. As a rule, it is the GGFs who are personally liable ? in case of doubt, the allegedly ?insolvency-protected? pension commitment is then gone. The joke here is that the cleaning lady is better protected than the GGF, because for the ordinary employees the protection by the PSVaG regularly takes effect and additionally the seizure protection according to §§ 850 ff. ZPO. Anyone who advises the GGF that the pension commitment is protected against insolvency is conveying half-truths. In the event of a claim, the GGF will probably find a litigation financier and accuse the intermediary of having given incorrect advice.
Second mistake: The judgement of the BGH from 07.04.2005 (Az. IX ZR 138/04) refers to a pension commitment ? therefore there is regularly (for tax reasons !) no irrevocable subscription right with the concerned reinsurance, because it does not concern organization of a direct insurance. The reinsurance policy had been pledged to the GGF, but was not revocable. In the case of the BGH, only the subscription right was revocable (see page 3 of the BGH ruling!). One could say that a close reading of the judgement helps. The BGH judgement shows, just like the judgement of the LG Erfurt, the following: Despite irrevocable pledging, it is an extremely incomplete ?insolvency protection? for the retirement provision of the GGF. The statement that the usual irrevocable pledge declarations are ?naturally protected against insolvency? proves to be simply incorrect according to the judgement of the LG Erfurt.
3rd misconception: The ?unnecessary confusion and worrying of brokers and intermediaries? obviously arises from too much naivety. For indeed there is cause for great concern about the incompletely trained brokers and intermediaries, after all they are in the front line of liability. Behind it stand then in second row the distributors, who paddle because of incomplete training (so-called ?guidance being to blame for?) also in the ?liability boat? Included in this are the sales and training managers, to whom a direct ?private? liability can be attributed from the point of view of the claim. This includes sales and training managers, who may be threatened with direct “private” liability from the point of view of claiming personal trust and/or their own economic interest.
Fourth mistake: The cheerful sales statement ‘Only a legally secure declaration of pledge protects the GGF in the event of insolvency’ falls short: because the ‘legally secure pledge’ is a necessary but not a sufficient condition for the protection of the GGF’s pension provision. A look at the website of the Federal Ministry of Justice shows that the problem has been recognised there and that statutory protection at a low level (see § 850 c ZPO ? currently unseizable for single persons just under 940 euros, for married persons just under 1,360 euros) is proposed for the future. For comparison: The cleaning lady is covered by the PSVaG. up to the 3-fold of the reference size (at present p.a. 28,980 euro ? multiplied with three) after § 18 SGB IV estimated: At present that is monthly pensions up to 7,245 euro in the west and/or 6,090 euro in the east ! exaggeratedly formulated: The intermediary could offer the GGF, in addition to the draft of an allegedly ?insolvency-protected? The intermediary could hand over to the GGF, in addition to the draft of an allegedly ?insolvency-protected? pledge declaration, ?in case things get tough? the judgement of the LG Erfurt and a social welfare application form.
Fifth mistake: Some ?management consultants?, ?consulting companies? and the like, but also the ?broker service? of some insurers, offer legal opinions on tax, labour and insolvency law: Please ask your doctor or pharmacist about the risks and side effects, because often such expert opinions and arrangements are not covered by the lawyer’s VSH. The insurer of the lawyer will refer, if the personal discussions are handed over to a financial mediator, to the fact that freedom from performance and/or no VSH coverage exists, if a knowing breach of duty is present: This is the case, for example, if an intermediary, an insurer or a sales company, among others, is factually interposed in the contact between lawyer and client. Typical signs of this are ?questionnaires for the sales representative? instead of personal clarification of the facts and personal discussion of the assessments. The lawyer acts dutifully, if he determines the facts personally, clears up his clients personally and advises personally: To leave this to a non-lawyer, thus e.g. a commercial management consultant or a financial mediator is regularly forbidden to the lawyer. In doing so, the lawyer must adapt to the client’s understanding, cf. BGH judgement of 24.09.1974 (VersR 1974, 1224). The lawyer may not delegate original lawyer duties to “employees, insurers, sales partners, personnel, etc.”, BGH NJW 1981, 2741. The intermediary is well advised to ascertain the personal creditworthiness of the lawyer beforehand, because his VSH insurer will regularly not be liable in the event of a claim. In addition, the lawyer would have to insure all ?employees? according to § 13 AHB – however, the lawyer assessor will hardly report all sales employees to his VSH insurer and pay the premiums for them: Also from therefore the intermediary usually works without the protection, by a lawyer liability umbrella.
In case of doubt, an intermediary will then also be held responsible for legal errors and should therefore only approach the top serious offers on the market.
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About the author
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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