– When is liability for damages and reimbursement of remuneration regularly incurred ? –
The Regional Court (LG) Saarbrücken decided in its judgement of 17.05.2016 (Az. 14 O 152/15) that the search for savings possibilities with existing private health insurance (PKV) is not directed at the proof or mediation of an insurance contract, § 204 VVG. Therefore, this is not a brokerage service but prohibited legal advice. The contract with the tariff change broker is therefore void, § 134 BGB. It does not entitle him to a fee. The broker is nevertheless liable for damages that are probably quite frequent in practice when changing tariffs, §§ 241, 311 BGB.
Tariff change advice is not a service typical of brokers
DIHK and LG München II used to see things differently (ruling of 16.05.2013, ref. 4 HK O 5253/12).
The Regional Court of Saarbrücken recognises that tariff change advice is not a service typical of brokers, i.e. the provision of evidence or the mediation of insurance contracts. When changing tariffs, no new private health insurance contract is concluded – instead, an existing contract is changed. It does not even matter that the tariff change broker had not mediated the original insurance contract.
This means that the tariff change broker will not have a “main contract” for which the legal service could legally be provided as a so-called ancillary service, § 5 RDG. An insurance consultant would be allowed to perform this activity, but (also) not for a performance-related fee, unless the rare case of § 4a I 1 RVG, § 49b II 1 BRAO applies as an exception (LG Hamburg, judgement of 22.03.2013, ref. 315 O 76/12). The broker had apparently previously worked as an insurance consultant – and believed that by switching to the brokerage profession he could legally receive a performance-related remuneration. Good design advice for the broker with XXXL risk looks different in any case.
Legal tariff change advice if the core and main focus is a brokerage
What matters is the content of the activity. It is also not possible to avoid the obligation to pay VAT by changing professions for the same activity. This would be like someone in Darknet offering the private enforcement of sentences without a court decision, and believes it is sufficient to report the activity as an executioner to the trade office according to the freedom of trade of § 1 GewO, § 14 GewO. The normal case for an isolated agreement on consultancy services (without brokerage contract) is a non-performance-related fee.
Success fees can hardly be structured, even in relation to non-consumers, for legal legal advice on “agreement, amendment and review of insurance contracts” by brokers, § 34 I 4 GewO. This fails due to the GTC Act and due to the hardly manageable proof that the respective brokerage remuneration agreement has been individually negotiated (not merely negotiated) (BGH, judgement of 20.03.2014, Az. VII ZR 248/13): Even the reference in the brokerage agreement, according to which the contractual provisions “have been seriously and extensively negotiated” is therefore invalid.
There was also the opposite case. A financial broker agreed to a time fee for credit mediation, with the exclusion of the performance fee: in the end, nothing could be claimed.
Narrow line between brokerage and crime?
Brokers can therefore act as intermediaries when changing from an additional tariff to a full private health insurance tariff, add further (additional) tariffs, or cancel previous insurance policies for re-coverage.
But also in property insurance and life insurance, the subsequent advice (agreed in isolation with non-consumers) without brokerage for the subsequent drafting of contracts in life and property insurance – such as increases in a contract (sum insured in life or household insurance), change of subscription right, reduction of the sum insured, exemption from contributions – would not be the mediation of a new contract, but insurance advice subject to authorisation.
Original mediation of the insurance contract does not justify prohibited legal advice
Some brokers believe that it would be a legal service to advise on insurance (tariff changes or whatever in any line of business) once they had arranged the original contract. However, this mediation has been completed. Even obtaining a cover note from the legal expenses insurer, as a “good” service, is regularly prohibited.
The estate agent may owe “care”, for example with regard to the follow-up obligation (OLG Düsseldorf, judgement of 30.04.1999, file no. 7 U 201/98, “Porsche case”), as well as updating the risk analysis, i.e. ongoing risk investigation and property inspection (BGH, judgement of 22.05.1985, file no. Iva ZR 190/83). However, this duty of care does not justify any isolated legal arrangement after the actual mediation has been completed, without a (new) mediation mandate. In contrast to the agent, the broker is not an “all-round advisor for a commission” but legally receives a “follow-up commission” which shares the fate of the premium.
In its “cleaning judgement” (BGH, judgement of 14.01.2016, Ref. I ZR 107/14): “The insurance broker’s duties vis-à-vis the policyholder include continuing to look after the insurance contract after it has been concluded by checking the contract without being asked for any need for adjustments and extensions and informing the policyholder in good time, promoting payment transactions, providing the policyholder with expert advice in the event of a claim, ensuring that claims are properly notified and safeguarding the policyholder’s interests in the settlement of claims. It follows: If the question of a change of cover arises on the basis of a current risk analysis, with regard to the previous cover in private health insurance, for example, the mere reference to the option of a tariff change is not sufficient, because the broker, as the custodian, has to consider all options and owes his advice and proper documentation to this end. A (multiple) agent can perhaps afford to change the private health insurance without tariff change advice – a broker as a trustee can hardly be expected to do so, if only because of the impending loss of the ageing provisions in the previous private health insurance.
If, for example, the broker’s customer wants to change the subscription right of his life insurance policy because he has fallen out with a child, then isolated legal advice in this respect with a kickback effect on the will and estate is not a “necessary” ancillary service in the sense of the RDG: the broker can also carry out his activities (verification or mediation – including support in non-legal matters, if necessary) without such legal advice. Conceptually, legal services that are not absolutely necessary for the profession are never permitted additional services. This is the very central misunderstanding in the illegal design.
When the contents of the brokerage agreement and brokerage power of attorney lead to double nullity
If brokers offer such services as amendments to existing contracts or have committed themselves to such services also for self-mediated contracts – and even more so for tariff change brokers – the entire contract and all powers of attorney could be null and void due to violation of a legal prohibition. In the bitter consequence the broker is liable for all negative consequences even without fault, i.e. he has to reimburse e.g. the reduced services after a change of tariff, even if he has done everything else correctly.
In addition, there is a risk that an actuary may find that the tariff change will be more expensive for the customer in the medium term than if he had kept the previous tariff. Or it is found that the standard tariff and an alternative supplementary cover would have been more favourable.
In addition: in the event of double nullity, the BoD has a data protection problem, as well as one with the insurance secrecy, and declarations of intent made through the broker, including changes in tariffs and terminations, are invalid. The BoD must pay the old higher benefits, but can only reclaim contributions to a limited extent – due to frequent statutes of limitations. Criminal law punishes the accomplice just like the offender, and is liable, § 27 StGB, §§ 823 II, 830, 840 BGB. Insurers are therefore increasingly challenged to reject broker’s powers of attorney if the obligation to correspond (BGH, ruling of 29 May 2013, ref. IV ZR 165/12) turns out to be a pure abuse of rights by illegally working tariff change brokers.
This is because the Regional Court of Saarbrücken has limited the broker’s permission to provide legal services (advice on insurance) only to a very limited extent to his permitted brokerage of new contracts. Incidentally, the correspondent broker is now also threatened that his customary market fee for support can easily be squeezed out of the company by the courts, or at least more closely across the Wupper. Have broker associations overslept such delicate details so far?
Ttariff bill brokers owe repayment of remuneration
According to the LG, the repayment of the remuneration does not only result from the contractual invalidity, but already from the fact that a performance-related remuneration without (genuine) brokerage services corresponding to the savings potential unreasonably disadvantages the client and is not transparent, §§ 305 ff. BGB.
Nor is fee-based advice to private clients permitted by law, § 34d I GewO.
The broker’s customer can demand repayment up to the limit of the limitation period after 10 years, § 195 BGB. In addition, (perpetual) revocation options could also exist, for example in the case of doorstep selling or contracts via the Internet or by telephone.
Free consultation with the previous broker and insurer including their agencies
According to §§ 6, 204 VVG, the insurer (VR) owes a free consultation on the change of tariff – including the change to tariffs which are otherwise no longer actively advertised. The insurance broker receives an annual follow-up commission for his “portfolio maintenance and customer care” anyway: According to the prevailing opinion today, he is obliged to look after the private health insurance customer anyway, and this without any (possibly additional) tariff change success fee.
Alleged professionals in private health insurance and KV tariff changes lead directly to liability
There are self-proclaimed “professionals” who spread the idea that the (portfolio) broker would be liable for the constant optimization of the “price-performance ratio”. It is true, however, that the broker has to make sure of the objective need, which is subject to constant change, and leads to a need for advice by checking the property and examining the risk.
Do settlement platforms also provide prohibited legal advice?
Even the search for alternative tariffs is considered a legal service by the LG Saarbrücken. Such searches are not only available for private health insurance tariff changes, but also as a service of comparison portals, possibly controlled by robots, possibly free of charge. In the case of free legal services, a responsible full legal expert would be required, § 6 II RDG; however, if leads are generated, this option is not available because of the payment for it.
Without a responsible broker as operator, and cumulatively with the aim of mediation, portals could thus also prove to be non-compliant with the law. This concerns, for example, comparison platforms including FinTechs, i.e. models that function via paid advertising or the sale of customer data (leads) to brokers. Professional associations of brokers could in future try to warn of such offers on the Internet.
Tariff change advice as a permissible ancillary service for referral to a health support fund
Sickness support funds are institutions that do not formally grant any legal entitlement to the services they actually provide or promise to provide. They are therefore not covered by the concept of insurance. Their intermediation is therefore unregulated and does not require permission, neither as agent nor as (commercial) broker.
The relief fund of the Carta Mensch Stiftung Deutschland (UKCM), for example, offers its agents and brokers the arrangement of supplementary health plans to the private health insurance, with which lower benefits of weaker tariffs or higher deductibles can be compensated, especially after a tariff change. Success fees can then be agreed with the customer, which can also be based on the total savings. Knowledge of the savings and tariff change options in private health insurance is a prerequisite for switching for UKCM. This means that advice on changing tariffs in private health insurance becomes a legal ancillary service to switching to UKCM – an elegant way of providing legal advice on changing tariffs in private health insurance. Particularly as the change of tariff is facilitated by the relief fund, which absorbs undesired reduced benefits.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.experten.de (published on 21.10.2016)
www.experten.de (published in ExpertenReport 10/2016, pages 62- 64)
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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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