The Administrative Court of Frankfurt/Main (VG Ffm, Az. 7 L 3307/18.F) decided in its decision of 28.09.2018 – completely in line with the Federal Financial Supervisory Authority (BaFin) – that even regular payments by an intermediary (VM) to the policyholder (VN) declared as a reduction in premiums are prohibited as a commission fee, § 48b of the Insurance Supervision Act (VAG). According to § 48b IV VAG, the only exceptions are permanent increases in benefits or premium reductions within the brokered contract, i.e. by the insurer (VR) – as well as benefits up to a de minimis limit of EUR 15 per year per contract.
Dubious business model for online portal – which also applies to offline brokers
The online distributor in question reimbursed customers for the commission from their insurance contracts and charged only a fixed fee – or brokered net rates without commission. The online portal turned against BaFin’s view that an exceptional case according to § 48b IV VAG did not exist – and failed. In particular, a premium reduction should have been permanent and should have been regulated in the insurance contract, i.e. it should have come from the insurer (VR) itself. The online portal wanted the VG to ensure that BaFin would not prohibit various boards of directors from working together (remedy of deficiencies).
Commission levies and other special remunerations
The legislator only added decades of case law to the law on advice from VR, and implemented EU Directive 2016/97 of 22.03.2017. Since 28.07.2017, the agent has been prohibited from providing benefits or services of any kind (special remuneration) to customers for the purpose of initiating or concluding a contract, unless they are limited to € 15 per contract and customer p.a. (ban on special remuneration and commission payments, § 48 b VAG). This concerns, for example, fuel vouchers for early bookers and voluntary services as a bonus.
However, this does not apply to benefits to UN, VP, beneficiaries on other occasions, such as birthday presents. The EUR 15 limit also does not apply to tipsters who are not integrated as UN etc.
Prohibition of the provision of goods and services by brokers?
The legal prohibition of payments to UN also includes other material and services provided by brokers, unless they are necessary in the context of brokering, because this could circumvent the prohibition of passing on as a monetary payment (commission passing on), §§ 48a, 48b VAG.
A broker may then not provide these services free of charge, except up to the negligibility threshold or for a fee that is discounted for this purpose.
If brokers provide services for which they are not obliged to act as brokers free of charge, this would be prohibited above the de minimis threshold. So you have to evaluate such a service and take a fair fee for it in order not to violate the law.
Special remuneration ban protects brokers from free services
The law is a great help when clients want something for free instead of paying the fee the broker wants. If free or improperly reduced services are a violation of the law, the sufficient fee for this can be justified even better. And by getting used to it, the way to a fee agent is paved. This also includes secretarial services, once the broker has sorted and recorded the customer documents and filed them for the UN with family.
The offsetting model (first fee agreement – later crediting to the commission if it is concluded) appears to be a real commission transfer, and is therefore also not permitted. The fee for additional services must not only be calculated first – it must not be waived afterwards as a reward for the conclusion of the contract.
by Dr. Johannes Fiala and Dipl.-Math. Peter A. Schramm
by courtesy of
www.versicherungsbote.de (published on 10.10.2018)
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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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