– When incomplete advice enables the complete reversal –
The OLG Saarbrücken (judgement of 26.02.2014, file no. 5 U 64/13) decided that the insurance broker has to point out the differences between the Rürup or basic pension and other models of a flexible private pension (already: OLG Stuttgart, in: VersR 2007, 1069). For example, information must be provided on the lack of ordinary terminability for the receipt of a surrender value. Not only tax advantages in the paying-in phase should be emphasized.
Compensation for damages due to faulty or omitted advice
In principle, every insurance broker has to fulfil the so-called “Sachwalterpflichten” (risk assessment, object examination, accountability, covering the risk). With respect to the brokerage of life insurance policies, case law demands, in accordance with the so-called BOND ruling, that the brokerage be “investor- and object-oriented” (BGH, ruling dated June 14, 2007, Ref. III ZR 269/06) – which addresses the insurance product and customer needs:
With regard to investor-oriented advice, it should be borne in mind, for example, that in future the majority of pensioners will be able to count Riester and Rürup pensions towards their basic provision. For these insurance customers, the use of money through the ongoing purchase of lottery tickets would usually be associated with more hope than the foreseeable, almost certain end result of only relieving the state. This can perhaps be mathematically proven later.
When providing property-specific advice, it should be borne in mind that life insurers (have to) invest predominantly in government bonds, but that since 2013 these are no longer certain to be repaid in full by the state in the end due to EU-wide national debt rescheduling clauses. In addition, there are more than a dozen possibilities for insurers (VR) to reduce their premiums, even below the guaranteed value – so that in the end, also because of the “zero interest rate” in the euro zone and the administrative costs, less than the sum of the premiums is increasingly often repaid.
However, object-oriented consulting also requires a basic understanding of the causes of the financial market crisis, as well as the difficulties of insurers in competing with banks for profitable investment opportunities. The planned privatisation of federal roads at home will hardly be able to stop the average drop in returns even on infrastructure investments – demand is enormous, but there is a lack of investment opportunities.
Nevertheless, recently ignorant people and politicians have been propagating a “sovereign wealth fund at cost price” for an expansion of funded pension provision: With zero return?
Without evaluation of the insurance conditions the advice is faulty
The OLG Saarbrücken clarifies that it is not enough to simply hand over the product information sheet and the insurance conditions to the insurance customer: “On the other hand, the insurance broker owes a prospective customer a much more extensive evaluation of the different insurance conditions and does not satisfy the above-mentioned obligation to advise by providing the prospective customer with a large number of documents for his own evaluation”!
In addition, since the Insurance Contract Act (VVG) in the version valid from 01.01.2008 at the latest, the broker must advise the customer – according to subjective wishes and objective needs – and provide a (professional) justification for each piece of advice, § 61 VVG.
In addition, this must be regularly documented at least in text form – in terms of content in accordance with the advisory duties according to law and jurisdiction – §§ 61 I, 62 VVG.
Secondary burden of proof lies with the intermediary
First of all, the policyholder bears the burden of proof and assertion of a breach of the duty of disclosure or advice. “The difficulties associated with proving a negative fact are compensated for by the fact that the other party must substantiate its denial of the alleged miscounselling and explain how it was advised or explained in detail. The mediator will hardly be able to do this without taking minutes of the consultation.
This is further aggravated by the fact that the documentation according to § 62 VVG is often regarded as the “best evidence of a miscounselling” – if the documentation of the intermediary is missing or if it is only a barely meaningful form, as has been observed up to now in up to more than 85% of the cases, this leads to a reversal of the burden of proof in favour of the insurance customer (BGH, judgement of 13.11.2014, III ZR 544/13).
The Higher Regional Court Saarbrücken clarifies this: “The burden of proof was even reversed to the defendant’s disadvantage because the minutes of the deliberations of 9 April 2008 submitted by the defendant were, contrary to § 61 (1) of the German Civil Code, not in accordance with § 61 (1) of the German Civil Code. 1 p. 2 VVG does not contain any documentation of the necessary advice just described.
If the insurance intermediary can provide documentation in accordance with § 61 Para. 1 VVG, the policyholder shall be granted an easing of the burden of proof up to the reversal of the burden of proof”.
Claimant may also claim back the full premiums
The insurance customer who had decided in favour of a basic pension or Rürup pension on the basis of bad or incorrect advice is entitled to a refund of the premiums paid by the broker.
The same applies if an agent was active instead of the broker. The BoD must then repay the premiums – and also any benefits drawn: The insurance agent is jointly and severally liable with the insurer.
To this end, the policyholder must surrender to the intermediary the subsequent annuities until these have reached the total amount of the premium refund.
In most cases, insurers intervene before a judgement is reached and then agree that both parties maintain silence so that the good reputation of the insurer does not suffer.
“The burden of proof for the damage and the causality of the breach of duty is always on the policyholder. However, he benefits from the presumption of correct conduct, i.e. the party required to provide information must prove that the person to be advised would have acquired the proposed product even if the information had been correct, i.e. he would have ignored the omitted information (general: BGH, judgement of 12 May 2009 – XI ZR 586/07 – VersR 2009, 1370)”.
Rürup pension as a tax savings model for old-age provision mostly unsuitable
The tax price of the Rürup pension is the (up to) full tax liability in old age – i.e. when you (as a customer need) usually need every cent to live anyway. In up to 15 years at the latest, this will soon affect more than half of the pension applicants, who will then feel impoverished or will be able to apply for a basic security pension. Investor-fairly it would be usually to select the higher taxation of the savings achievement, which can be borne more easily in the working life – thus then under no circumstances a basis pension, as in the meantime for instance the regional court Heidelberg is to have written above all structure expellees in the master book in the absence of clearing-up over the tax load at the age.
Ineffective liability clauses in the brokerage agreement do not protect the broker
Some brokers feel themselves to be experts for risks, but decide – not free of legal error – to shorten the limitation period of their liability ineffectively, § 309 No.7 b BGB. Even the addition “unless mandatory legal provisions (…) conflict with it” cannot remove the invalidity of a limitation of liability (BGH, ruling of 22.09.2015, ref. II ZR 340/14).
Obligated to provide advice despite waiver of advice
More often you can find canned brokerage contracts, even on the Internet. In this case, a waiver of consultation is agreed. However, the legislator has only permitted this by means of forms if it is a “separate written declaration” according to § 61 II VVG, i.e. with a signature, § 126 BGB. Anything else would also be anti-competitive (LG Köln, judgment of 14.10.2005, ref. 84 O 65/15).
The frequent promise of support or contract management by the broker leads to a continuing obligation – he must therefore constantly advise and check. If the customer’s claims against the insurer become statute-barred at any time, the period of limitation due to the broker’s fault shall only then begin to run at all.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.experten.de (published on 29.01.2018)
www.komet-pirmasens.de (published in issue 5596 of 30.01.2018, page 4)
www.innovationundtechnik.de (published in issue 2/2018, pages 32-34)
www.handwerke.de (published in Computern im Handwerk, issue 01/02-2018, page 6-8)
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About the author
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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