Professional self-insurance or health support fund

– Supervision-free alternatives to private health insurance –

I. Distinction from insurance business subject to prudential supervision

A widespread – and erroneous – view is that anything that somehow falls within the scope of insurers’ activities must be insurance subject to licensing. Even very obvious examples show that this obviously cannot be the case. For example, a life-long annuity is promised in return for the transfer of a sum of money, which is calculated according to actuarial principles in such a way that its cash value corresponds exactly to the amount of money given. Instead of a sum of money, it is also possible to transfer, for example, real estate or a business. Employers promise pensions and disability benefits, longer salary continuation or allowances in case of illness.

No one would think of considering this as an annuity business, per diem sickness insurance or medical expenses insurance that requires a licence. Support funds or occupational social security schemes provide retirement benefits (others also provide reimbursement of medical expenses) and are not subject to prudential supervision because they do not formally grant a legal right to their benefits. Many of these commitments are so self-evident that no further thought is given to why they do not actually constitute insurance business requiring a licence. It becomes critical when the idea is expanded. A pension commitment by the employer in return for converted remuneration is not an insurance transaction requiring a licence, as practical experience has shown. But how is a deferred compensation1 for a promise of longer continued payment of salary, dental allowances or exemption from occupational liability claims to be assessed, or even the assumption of costs for household damage or from the employee’s private liability by the employer?

The exact boundary between commitments not requiring a licence and insurance business requiring a licence is – at first glance – just as difficult to fathom as the boundary line between desert
and steppe; only if you are sufficiently far in the area in question can you really be sure of it. Otherwise there is a risk that the supervisory authority (or
later also an administrative court) sees insurance business requiring a licence in certain activities. In the case of the provident fund, one might think that the legal entitlement to its benefits is excluded and that there is therefore no obligation to obtain a permit. However, if the legal claim has not been effectively excluded2 , a genuine insurance transaction exists.3 In view of the penalties imposed by Section 140 of the Insurance Supervision Act (up to one year’s imprisonment for unauthorised insurance operations) and the risk that the supervisory authority will order the immediate cessation of business operations and liquidation, it is advisable to examine the legal situation in advance.

II Legal situation

The legal question to be examined is the following: Is the employer, the occupational social security scheme, the occupational ’emergency and provident fund’ or the occupational or other provident fund subject to the obligation to supervise insurance? In particular, the relevant current case law and literature opinions are to be taken into account.

1. legal position of employers

With regard to promises made by an employer, a distinction must be made as to whether they are made without legal obligation or are legally binding. They may also be provided by the employer directly or by an independent body4 . There are differences here, for example, with regard to the involvement of the works council in each individual case of a benefit, the tax deductibility as a business expense or the extent of taxation as wages. At this point, however, we would like to focus on the distinction between insurance business that requires a license and insurance business that does not – tax and accounting issues would be a separate topic.

The relevant provision here is § 1 VAG. In the case of employers, there is no insurance business requiring a licence if he does not give his undertakings as such, the object of which is the operation of insurance business. Rather, the object of the company is different – for example, the production of dog food. To this end, it uses employees with whom it has concluded employment contracts. These employment relationships give rise to a duty of care on the part of the employer. As long as he now makes commitments (e.g. for old-age pensions, reduction in earning capacity, incapacity for work or illness) within the framework of this duty of care – and thus predominantly in the interest of the company – this is merely a dependent ancillary transaction which is, as it were, connected with the employment relationship as a side agreement5 .

This also includes, for example, promises of sickness benefits for private employees, which occasionally occur in the form of civil servants’ allowances. This also includes supplementary benefits and allowances to the extent of the statutory health insurance cover – e.g. for visual aids, dentures, supplementary sickness benefits. Another recognized benefit is the employer’s contribution to the deductible of private health insurance coverage. In addition, benefits – not even specified in advance – are possible in the event of “emergencies”.

For the treatment of these expenses or of the benefits paid to the company (legally incorporated or unincorporated) social institutions as business expenses as well as for the treatment of the benefits to employees as taxable wages, there are several legal regulations in detail which must be observed for the optimal structuring of such commitments. Depending on the case, deferred compensation may also be an option.

2. legal position of provident funds as associations of persons

What has been said for employers applies accordingly to occupational provident funds. Following the definition of § 1 (3) No. 1 VAG, another support fund is an association of persons which grants support to its members without the latter having a legal claim to it. The term “support” is very general – it can mean, for example, support in the event of old age, incapacity for work, disability, illness, unemployment, birth, death or other “emergencies” (in order to avoid the term “insured event” here). Those who – as offered by some associations – would like to cover their medical costs, for example, not with a statutory or private health insurer, but on a mutual basis or as a solidarity community, have the option of provident funds for this purpose – the only thing is that no legal entitlement to benefits may be granted. A provident fund is thus largely free in the structuring of contributions and benefits – certain “calculation procedures “6 or even only risk-adjusted contributions cannot be prescribed. Contributions may therefore be differentiated according to social aspects. In the case of medical expenses, for example, it is more conducive to personal responsibility if, instead of setting up an ageing reserve, provision is made, for example, for individual savings and, instead of contractually defined benefits and exclusions, benefits are taken up in accordance with more flexible and, in individual cases, more reasonable and cost-effective principles. The idea of solidarity is preserved – unlike in the case of anonymous insurer-customer relationships – especially if the provident fund is not unmanageably large and is organised, for example, at a local or professional level.

3. management of a sickness support fund

As an example of the possibilities of a support fund, the health support fund may be mentioned. The processing of a provident fund – IT, consulting, application intake, administration and benefit regulation – can be carried out by professional service providers7 , as can the legal and actuarial support, which includes risk controlling, in particular the assessment of contributions, reserves and collateral as well as the required reinsurance protection. In practice, each member may have additional private health insurance coverage under a plan with a very high deductible. This protection may also take the form of reinsurance cover taken out by the provident fund. Reinsurance cover with a reinsurer is conceivable and also legally permissible in relation to non-primary insurers such as a provident fund, but has not yet been introduced in Germany8 , in particular because the volume of this business is still too small. Depending on the risk appetite, such supplementary reinsurance protection may be dispensable – if the portfolios are sufficiently large and the capital reserves are sufficient – and may be replaced by higher reserves, more cautious premium calculation and possible additional funding obligations under membership or company law.9 In particular, freelancers, self-employed persons, employees who are not subject to compulsory insurance10 and persons entitled to benefits are eligible for membership – insofar as benefits (medical expenses or daily sickness allowance) are provided for in addition to the statutory health insurance, also members of the GKV.

4. when is a health support fund subject to insurance supervision?

Whether a sickness support fund (KUK for short) is subject to insurance supervision11 is determined by § 1 para. 1, para. 3 No. 1 ISA. According to § 1 para. 1 of the Insurance Supervision Act (VAG), companies whose object is the operation of insurance business and which are not social insurance institutions (insurance undertakings) are subject to insurance supervision.

(a) the concept of an undertaking

The concept of an undertaking is not defined by law;12 therefore, the purpose of the provision becomes more important13. The objectives of insurance supervision are to ensure that contracts can be fulfilled on a permanent basis (see section 8(1) sentence 1 no. 3 ISA) and to safeguard the interests of insured persons (see section 81(1) sentence 2 ISA)14. In order to be able to meet these objectives as far as possible, the concept of an undertaking must therefore be interpreted broadly. Accordingly, it can be assumed that the competent supervisory authority will regard a KUK as an undertaking. Furthermore, a KUK is not a social security institution.

b) Concept of insurance

A KUK would have to be engaged in the business of insurance in order to be subject to prudential supervision. The term insurance is not defined by law. According to case law, an insurance transaction exists if certain benefits are assumed in return for payment in the event of an uncertain event, whereby the assumed risk is distributed among a large number of persons threatened by the same danger and the assumption of risk is based on a calculation based on the law of large numbers.15 The insurance would therefore have to relate to uncertain events, where the “if”, the “when”,16 but also the “how” and the “how much” of the occurrence is uncertain.17 This can be affirmed in the case of a KUK. It is not possible to predict in advance when the treatment of an individual member’s illness will require payment. The KUK grants funds for the treatment of illnesses of its members. Thus, the content of the undertaking relates to a similar risk which is spread over a certain number of persons. Insurance is also required to be planned; risks must be balanced collectively on the basis of the law of large numbers.18 The law of large numbers states that randomness in statistical mass observations has a smaller relative effect the larger the observed mass.19 In concrete terms for the KUK, this means that membership fees must be calculated in such a way that the association’s purpose can be fulfilled from the total income. This can regularly be assumed in the case of a KUK20. Similarly, an independent commitment is present. Agreements that are intrinsically connected with a legal transaction of a different kind and receive their actual character from there are not insurance policies.21 The activity of a KUK is aimed at the relevant activities and is not intrinsically linked to other legal transactions.

(c) Remuneration

Furthermore, the KUK would have to act in return for payment; insurance contract law considers the payment of the insurance premium to be the main obligation of the policyholder – see § 1 para. 2 S. 1 VVG.22 In an insurance contract, the performance obligation of the entity and the consideration promised for it are in a legal relationship of performance and consideration;23 the view that the insurance contract is a mutual contract is widespread.24 However, a mere sponsoring membership fee is not sufficient if it only serves the realization of the association’s purpose and is not remuneration for an assumption of risk.25 The members of a KUK usually pay a monthly contribution from which the services are provided. In insurance contract law, contributions paid to a mutual insurance undertaking are deemed to be insurance contributions in accordance with section 1(1). 2 p. 2 VVG, also as premiums. It is questionable whether this equal assessment can also be adopted for insurance supervisory law.

As a counter-argument, one could argue that the equal treatment of premium payments and contributions in § 1 para. 2 VVG, the policyholder is granted a further possibility of performance for reasons of simplification of commercial transactions, which is also the telos of the provision; in insurance supervision law, on the other hand, other values and objectives apply. Moreover, a KUK is often organised – possibly inadmissibly or ineffectively – in the form of a registered association and not in the form of a mutual insurance association, so that § 1 para. 2 S. 2 VVG does not contribute to the answer to the question whether a fee is paid to the KUK. A decision of the BVerwG of 25.11.1986 may be helpful.26 The dispute concerned the obligation of an association without legal capacity to supervise insurance. This had made itself ” the mutual support with the death of a member, by collection of a support contribution with all members a unique aid in accordance with § 5 of this statute can be granted” to the association purpose.

The court denied that the association was subject to the duty of supervision. The decisive factor here was the finding that it was apparent from the statutes of the plaintiff association that “the ‘support contribution’ to be paid by each individual member is not consideration for a service of the plaintiff promised to this member, but exclusively represents the share of the individual member in the realisation of the community purpose owed under membership law. Accordingly, the plaintiff does not make its payments to cover third-party risks – not in fulfilment of a guarantee promise made by it to the individual member27 – but in fulfilment of its autonomously set and autonomously to be performed task of bearing an appropriate part of the funeral costs of its deceased members. Their payments are therefore not insurance benefits. “28 In this case, therefore, the assumption of risk, which – according to apparently widespread opinion – is synallagmatic with the payment of remuneration,29 was to be denied. This also means that there is no remuneration that is relevant for the ISA. However, caution is required in reaching this conclusion. The quotation taken comes from the context of an examination of the – alleged – policyholder’s legal claim and not from an examination of whether remuneration within the meaning of the ISA has been paid.

If one considers that only a payment made in return for the assumption of a risk is regarded as remuneration,30 one can, however, come to this view because a risk is not assumed here. Incidentally, the BVerwG itself seems to infer from the lack of remuneration character to the lack of an assumption of risk – see the above quotation from the judgment: “hereinafter”. The BVerwG also states in support of its decision that there is no legal entitlement that monthly subscriptions and support can be determined otherwise by the general meeting at any time and quite independently of each other with effect also for existing memberships and cases of support that have already occurred.31 In this context, the question arises as to how far this can be reconciled with the assumption that there is remuneration here. If one assumes a contractually owed remuneration, it would in any case have to be examined to what extent the insurance company – which is not the case here – can change the insurance contract – which is also to be denied – precisely also with effect for already existing insurance contracts. These contract amendments may give rise to problems of novation of the contract, the principle of good faith, and perhaps also specific provisions of insurance contract law, so that there may be a further argument against the existence of an insurance undertaking. After all, the VVG also permits the amendment of insurance conditions in principle.

As a result, the BVerwG denied in its ruling the existence of a legal claim and thus also an insurance obligation of the association. From the point of view of the BVerwG’s argumentation, there was probably no remuneration in this case either. The facts addressed by the court bear some similarity to the facts of a KUK under discussion here.32 The KUK model is based on the idea that membership fees should not benefit the paying member, but should be given (as a gift, so to speak) to other members who need help. Here, too, it could possibly be argued that members of the KUK do not pay their contribution as (insurance) remuneration, but rather make their individual contribution, which is owed under membership law, to the realisation of the community purpose – health care and treatment of the illness of the individual.33 Should one come to the conclusion that the membership contributions are gifts in the legal sense (§§ 516 ff. BGB), the following should be pointed out in conclusion: if a company gives its guarantee promises as a gift in individual cases, this company remains an insurance company; otherwise, a company could evade its status as an insurance company by promising its benefits free of charge in a few cases.34 Furthermore, gratuitousness is not to be equated with the pursuit of profit. A KUK cannot plead that it has no profit motive; the activities of mutual insurance companies (§§ 15 et seq. VAG) and some insurance companies under public law would otherwise not be insurance in this case.35

(d) Legal entitlement to benefits

Furthermore, the KUK would have to have granted its members a legal claim to the benefits for treatment of illnesses in order for it to be insurance business subject to authorisation. These benefits are to be defined in advance in a legally binding manner.36 The legal right in question must arise from a statute or contract.37 In addition, included so-called optional benefits are also legally binding, as they require a discretionary decision that can be reviewed and enforced in court. A legal entitlement to such benefits is excluded, for example, if the statutes stipulate: “There is no legal entitlement to benefits. Nor is such an entitlement established by repeated or regular payments in other cases. All benefits are provided voluntarily.” Often, a benefit is provided only at the request of the individual member and after approval by the board of directors. If a legal claim to the benefit has been effectively excluded, there is also no insurance.

For neither the linking to a mere feeling of solidarity38 alone, nor possibly existing expectations39 are capable of establishing legal claims. The same applies to actual exercise of a business.40 However, it may be questionable whether an exclusion of legal claims formulated in a clause or in the articles of association satisfies the requirements of case law. According to old case law of the Federal Administrative Court, an exclusion which is of a purely formal nature is not effective.41 In contrast to this, today case law requires for the validity of the exclusion that the acceding parties, when exercising the due diligence to be required of them, can readily recognise from the accession documents that they are not granted the listed legal rights.42 The earlier case law of the Federal Administrative Court is thus outdated.43 The exclusion of legal claims should be clear from the statutes, as explained. Information brochures and website and any advertising should also state “There is no legal entitlement to the benefits.” Mirroring this, the word “insurance” in particular should be dispensed with in KUK’s advertising and articles of association.

In addition, the application for admission to the KUK should also contain a note in a prominent place stating “There is no legal entitlement to benefits. Such a claim is also not established by repeated or regular payments in other cases.” The aim is to prevent a possible objection that the relevant clauses are invalid because they are surprising. If they are ineffective, there is still an obligation to pay benefits and it is an insurance transaction that requires a licence. Typical of this would be if the clause is found in conditions in a place where one would not even suspect it44 , and perhaps even otherwise a completely different impression is created. In this way, it is therefore possible for the acceding parties, when exercising the diligence to be required of them45 , to recognise that a legal claim to benefits from the KUK is excluded. Measured against the current case law of the Federal Administrative Court, the exclusion is accordingly effective. Thus, a special need for protection, which could justify the duty of supervision, also regularly ceases to exist; the contractual partner must be aware that he may not receive any performance.46 Furthermore, considerations of the protection of legitimate expectations, which were previously used by case law47 to justify a duty of supervision, come to nothing.48 As a result, a KUK which fulfils these requirements is not an insurance undertaking within the meaning of Section 1(1). 1 ISA. This result is typical of provident funds; the supporting argument of their freedom of supervision is the appeal – also present in the case of a corresponding health support fund (KUK) – to a genuine sense of solidarity on the part of the members.49

(e) materiality threshold?

Should one nevertheless come to the conclusion that an insurance within the meaning of § 1 ISA exists, the question remains whether an insurance business within the meaning of the provision exists. The underlying idea concerns the question of whether the activity in question has exceeded a materiality threshold above which the legislature considers insurance supervision to be necessary.50 The operation of insurance business means a planned activity calculated for the long term and aimed at the continuous conclusion of an indefinite number of insurance contracts.51 What is required is the intention to enter into insurance contracts on a relatively uninterrupted and permanent basis.52

Thus, according to the above requirements, there is an operation of insurance business. Critical of this approach, stands Kaulbach. The interpretation of the term was too much focused on the conclusion of the contract; it could not be convincingly explained why an undertaking which had ceased acquisition for some time or completely would continue to be subject to insurance supervision.53 Therefore, Kaulbach focuses on the necessity of a business operation set up in a commercial manner.54 Necessity is determined here according to qualitative (type) and quantitative (scope) standards from a typological perspective.55

In the past, turnover, or at best capital investment, was an important decision-making criterion.56 In the 1970s, the lower courts assumed the requirement of a commercial business set up for a turnover of DM 200,000 – 250,000.57 Röhricht extrapolates these figures in 2001 to DM 500,000 – 1,000,00058 ; i.e. to approx. EUR 250,000 – 500,000. The practice in this respect is inconsistent to contradictory; the overview is further complicated by the fact that, on the one hand, there are almost no judgments (especially of the Federal Supreme Court) on this question and, on the other hand, because the bulk of the published material dates from the 1960s and 1970s.59

III. design recommendations

Some providers of a KUK surprisingly find that they come into conflict with BaFin and, due to negligent design, are then also defeated before the administrative court.60 This, i.e. in particular the prohibition of insurance business by BaFin, still seems mild on closer inspection. Finally, the provider is threatened with rescission, not only for the reason of violation of legal prohibitions, especially according to § 823 II BGB in conjunction with the VAG and/or KWG. In addition, criminal liability may also arise on suspicion of deceiving customers or committing fraud. In the area of the KUK, considerable duties of clarification can also arise simply from the fact that “contributions” of the members would regularly not be tax-deductible as special expenses and, moreover, benefits of the KUK to the members – apart from conceivable minor benefits of the KUK – can be taxable. This is also where design approaches lie.

Finally, actuarial considerations are usually required to ensure that management is on commercially sound ground when it comes to the question of reinsurance and the concept of a major loss provision. Consequently, the management of a KUK may find itself exposed to the suspicion of breach of trust and breach of commercial diligence despite an effective exclusion of benefits if no assets are available to cover major losses. Finally, it can be urgently recommended to use the experiences from insurance companies also for the health support fund. Where there are deviations – assessment of premiums, development of premiums in old age, pay-as-you-go shares, reserves and other security funds, the possibility of reducing benefits or levying supplementary contributions – the effects associated with these require all the more precise analysis the further one departs from the usual of private health insurance. Only through professional actuarial and legal advice is it possible to avoid the – largely foreseeable – pitfalls. Properly implemented and well communicated to its members, the health support fund has a potential that promises it a stronger role in the market.

Their essential advantage – flexibility and a sense of solidarity among the members – is linked precisely to their manageable size. With appropriate organisation and cost-effective outsourcing of functions to specialised service providers, KUK can therefore be an attractive proposition, even in comparison with larger insurance companies.

by Johannes Fiala, Attorney at Law, Munich, Dipl.-Math. Peter A. Schramm, Diethart and Sebastian Schechinger

1 Or any other “salary waiver” or benefit under the “cafeteria” system. 2 Keyword e.g. invalidity of the exclusion due to a surprising clause. 3 Thus decision of the Administrative Court Frankfurt a. M. of 07.06.2006 – 1 G 1358/06 (2) in the case IHS/BaFin. 4 E.g. a “company welfare institution”. 5 E.g. with the aim of attracting or retaining employees. 6 E.g. the calculation regulation with regard to health insurance calculated in the manner of life insurance. 7 While this is already a large market in the USA, Germany still has a small – but qualified and expandable – offering here, which has arisen primarily from outsourcing from insurance companies. 8 In contrast to the USA. 9 If necessary, the services must – and can – be adapted to the available funds. 10 However, there is no entitlement to an employer subsidy in the UK. 11 Even in the case of examinations of health support funds by BaFin – after the exclusion of a legal claim to benefits was clearly anchored in the statutes etc. – freedom from supervision was established. 12 Kaulbach in Fahr/Kaulbach, VAG, 3rd ed., Munich 2003 § 1 marginal no. 41. 13 BGH of 13.10.77 – II ZR 123/76 – NJW 1978, 104 (104). 14 For more details on the objectives see. Waclawik in Beckmann/Matusche-Beckmann, Handbuch des Fachanwalts Versicherungsrecht, Munich 2004, p. 193. 15 BVerwG of 29.09.1992 – 1 A 26/91 – VersR 1993, 1217 (1217 f.); BVerwG of 19.06.1969 – BVerwG I A 3.66 – BVerwGE 32, 196 (197) and BVerwG of 25.11.1986 – BVerwG 1 C 54.81 – BVerwGE 75, 155 (159 f.); with the same wording.); this concept of insurance appears for the first time, in a linguistically somewhat modified form, in a judgement of the BVerwG in 1956: “An insurance contract exists if the insurer assumes a risk if, in return for payment, he assumes a certain benefit in the event of the occurrence of an uncertain event, whereby this risk is distributed among a plurality of persons threatened by the same danger, and the assumption of risk is based on a calculation based on the law of large numbers…”. (BVerwG of 22.03.1956 – BVerwG I C 147.54 – BVerwGE 3, 220 [221]). 16 Sieg ZVersW 1969, 495 (497). 17 Kaulbach, loc. cit. Fn 12, marginal no. 12. 18 BVerwG of 19.05.1987 – 1 A BVerwG 88/83 – VersR 1987, 701 (702); BVerwG of 24.02.1987 – 1 A 49/83 – VersR 1987, 453 (454); BVerwG of 25.11.1987 – 1 C 54/81 – VersR 1987, 297 (298) = BVerwGE 75, 155 (159 f.); BVerwG of 11.11.1986 – 1 A 45/83 – VersR 1987, 273 (274); BVerwG of 22.03.1956 – BVerwG I C 147/54 – BVerwGE 3, 220 (221). 19 Präve in Prölss/Kölschbach et al., VAG, 12th ed., Munich 2005, § 1 marginal no. 43. 20 Leaving aside – for the moment – cases in which sickness benefits are raised e.g. through collections, donations, allocation of fines or raffles. 21 BVerwG of 29.09.1992 – 1 A 26/91 – VersR 1993, 1217 (1217 f.); example: additional guarantees against payment when buying a car. 22 Hahn in Beckmann/Matusche-Beckmann, Versicherungsrechtshandbuch, 1st ed., Munich 2004, § 12 marginal no. 5; Wandt in Halm/Engelbert/Krahe, Handbuch des Fachanwalts Versicherungsrecht, 1st ed, Munich/Unterschleißheim 2004, p. 48. 23 BverwG of 25.11.1986 – 1 C 54/81 – VersR 1987, 297 (298); BVerwG of 11.11.1986 – 1 A 45/83 – VersR 1987, 273 (274); BVerwG of 24.02.1987 – 1 A 49/83 – VersR 1987, 453 (454). 24 Prölss, J. in Prölss E. R., VVG, 27 Aufl., Munich 2004, § 1 Rn. 30. 25 Präve, loc. cit. fn 19, marginal no. 36. 26 BverwG of 25.11.1986 – 1 C 54/81 – VersR 1987, 297. 27 “the insurance business is a risk assumption business in the nature of a guarantee contract”, according to the court in the same judgement printed in VersR 1987, 297 (298) in a somewhat earlier place; so also BVerwG of 24.02.1987 – 1 A 49/83 – VersR 1987, 453 (454). 28 BverwG of 25.11.1986 – 1 C 54/81 – VersR 1987, 297 (298); see also the same argumentation in BVerwG of 11.11.1986 – 1 A 45/83 – VersR 1987, 273 (275). 29 Prölss, loc. cit. marginal no. 30. 30 BverwG of 25.11.1986 – 1 C 54/81 – VersR 1987, 297 (298); “If the activity of an association does not have as its object the legal transaction of assuming risks in return for payment in the sense set out, then for this reason alone the association does not engage in insurance business within the meaning of § 1 VAG.”, BVerwG of 24.02.1987 – 1 A 49/83 – VersR 1987, 453 (454). 31 BverwG of 25.11.1986 – 1 C 54/81 – VersR 1987, 297 (298 f.). 32 The facts of the case are printed in full in VersR 1987, 297 (297 f.). 33 This is the wording of the argumentation in BverwG of 25.11.1986 – 1 C 54/81 – VersR 1987, 297 (298); see above. 34 Kaulbach, loc. cit. Fn 12, marginal no. 18. 35 Kaulbach, loc. cit. Fn 12, marginal no. 18. 36 Kaulbach, loc. cit. Fn 12, marginal no. 20. 37 Präve, loc. cit. Fn 19, marginal note 39. 38 Präve, loc. cit. Fn 19, marginal no. 39 with further evidence. 39 BVerwG of 24.05.1960 – BVerwG I C 45/57 – NJW 1960, 2019 (2020). 40 Präve, loc. cit. fn 19, marginal no. 39. 41 BVG of 22.03.1956 – I C 132/54 – BVG VersR 1956, 361 (361); BVerwG of 24.05.1960 – 1 C 144/59 – BVerwG VersR 1960, 1105 (1106); BVerwG of 10.01.1961 – 1 A 4/59 – VersR 1961, 306 (307); BVerwG of 25.10.1962 – 1 C 12/60 – BVerwG VersR 1963, 53 (54); BVerwG of 21.09.1967 – 1 C 31/65 – BVerwG VersR 1967, 1085 (1086); rejecting Flockermann/v. Wick VW 1997, 695 (698). 42 BVerwG of 11.11.1986 – 1 A 45/83 – VersR 1987, 273 (276); BVerwG of 05.05.1987 – 1 A 49/83 – VersR 1987, 453 (456). 43 S. BVerwG of 25.11.1986 – 1 C 54/81 – VersR 1987, 297 (300). 44 Because conditions are not read in their entirety, but only in excerpts of the passages that are important at first. Thus, for example, a provision only hidden under point jurisdiction, which concerns something else, would be surprising and ineffective. 45 This does not mean that the terms and conditions must be read in their entirety and taken note of. 46 BVerwG of 10.01.1961 – 1 A 4/59 – VersR 1961, 306 (307). 47 See for example BVerwG of 25.10.1962 – 1 C 12/60 – Vers 1963, 53 (54). 48 Präve, loc. cit. Fn 19, marginal no. 40. 49 Präve, loc. cit. fn 19, marginal no. 65; however, other evaluations apply to the area of labour law, see Kaulbach, loc. cit. fn 12, marginal no. 21. 50 Kaulbach, loc. cit. fn 12, marginal no. 37. 51 Kaulbach, loc. cit. Fn 12, marginal note 38. 52 Kaulbach, op. cit. Fn 12, marginal note 38 with further evidence. 53 Kaulbach, op. cit. Fn 12, marginal no. 39. 54 Kaulbach, loc. cit. Fn 12, marginal no. 40. 55 Hopt in Baumbach/Hopt, HGB, 32nd ed., Munich 2006, § 1 marginal no. 23. 56 Röhricht in Röhricht/Graf v. Westphalen, HGB, 2nd ed., Cologne 2002, . Rn. 115. 57 Röhricht, loc. cit. Rn. 117. 58 Röhricht, loc. cit. Rn. 115. 59 Röhricht, loc. cit. Rn. 110. 60 Cf. VG Frankfurt/Main, Az. 1 G 1358/06, decision of 07.06.2006.
(Source: Law Office of Dr. Johannes Fiala)
A reprint of the text can also be found in VersR 34/2006, 1602.

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About the author

Dr. Johannes Fiala
PhD, MBA, MM

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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