The tariff change according to § 204 VVG – (not) a typical broker task!

How insurance brokers deprive themselves of their remuneration through incorrectly designed sample contracts
“It’s not the fall that kills you – it’s the sudden stop at the end.” (Douglas Adams)
By judgment of 01.06.2012, the District Court of Schwäbisch Hall ordered an insurance broker to repay the remuneration for brokering a change of tariff. This insurance broker has deprived himself of his remuneration by means of an incorrectly designed form, and has also had to pay the legal costs. Some of the insurance brokers are irritated and since then do not help customers with the reinsurance according to § 204 VVG against a separate success fee. However, reinsurance with the same insurer is regularly a broker’s task.

The misrepresentation of mediation as so-called transformation

No normal estate agent would think of arranging a smaller ground floor flat for a third floor resident and then describe this as “conducting negotiations with the landlord with the aim of reorganising the residential tenancy”. In doing so, he would be stepping straight onto the slippery slope of prohibited legal advice.
It is just as “deadly” as insurance brokers in such a way, thus “as reorganization of contracts” the switching of a tariff change with the same insurer to offer. This leads directly to an accusation of unauthorized legal or insurance advice, and the complete loss of the intended contingency fee. Such bad contract samples with as it were highly impostor contents, because in it the emphasis of the own service was wrongly described, leads inevitably to the loss of the necessary incomes.

By way of illustration, here is the example of a haulier who also received no remuneration

The forwarder transports a good, but he also takes out the necessary insurances and fills out the customs forms. If such an unfortunate forwarder were now to get the idea of exaggerating the filling in of forms and the insurances in his contract, e.g. by placing the examination of the legal questions in connection with a transport in such an impostor-like manner in the foreground, but only giving the actual transport the same importance as the lawyer’s transport of the statement of claim to the night mailbox of the court, then he has lost. It is even worse if it also says something like “conduct the negotiations and award the contract to a freight company or courier service”. If, on the other hand, he uses such a person as a subcontractor, then it is a purely necessary ancillary service that he must have come to a prior contractual agreement with him and awarded the contract to him.
One could have the fun of filtering out the individual steps with legal content from the activities of a freight forwarder (with subcontractors for the actual movement of goods) and present them as such in sequence in writing, and there you have someone whose activities are considerably influenced by legal advice and legal design. And to reinforce this, he says best of all that he has nothing whatsoever to do with the actual transport of goods itself, but only provides the ancillary services, and therefore does not want any money for the transport, but a consultancy fee for the ancillary services. 

Should an insurance broker arrange tariff changes according to § 204 VVG? 

Even if the broker is allowed to arrange tariff changes according to § 204 VVG, it remains questionable whether he really should. This is because such tariff changes work differently and are more complex than new placements. The inclusion or partial non-inclusion or redistribution of the various parts of the ageing provisions alone leads to effects that are only visible at a later date and which are only likely to be fully understood by an actuary familiar with the calculation and actuarial technology of private health insurance tariffs and the practices and technical planning scope of the insurers. Nevertheless, in comparison with such an external expert, a broker is easily measured by courts even more strictly against the full standard of his brokerage duties. What he is allowed to do in principle, but in the end – due to a lack of relevant knowledge and experience, which can certainly be learned – may not be able to do to the full extent, should possibly be left to specialists. 

Conclusion for insurance brokers

It is particularly tricky to copy any sample contracts from textbooks written by so-called experts. Equally precarious are the brokerage contracts that can be obtained through reputable structural distributors. The disappointment is great when these “patterns without value” do not hold up in court. Then it becomes completely quiet – one knows “one does not look a gift horse in the mouth”, but if one suffers then still large fortune losses before court, such contract samples become the annoyance avoidable from the outset.
Dr. Johannes Fiala, graduate mathematician Peter A. Schramm

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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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