Prohibition of commission payments

The ban on special remuneration and commission payments prohibits it according to To grant or promise special remuneration from an insurance contract in accordance with section 48b (1) of the VAG insurance companies , insurance brokers and their employees, policyholders , insured persons or beneficiaries . This is also a market behavior rule within the meaning of Section 3a UWG .

The regulation serves to implement Directive (EU) 2016/97 of the European Parliament and of the Council of January 20, 2016 on insurance distribution. With Art. 2 of the law implementing Directive (EU) 2016/97 of the European Parliament and of the Council of January 20, 2016 on insurance sales and amending other laws of July 20, 2017, the VAG was amended accordingly with effect from July 29, 2017 changed.

BaFin explained the new regulation in circular 11/2018 of July 17, 2018 .

Legal history

The prohibition of commissions on life insurance is originally based on an announcement by the Reich Supervisory Office for Private Insurance from August 14, 1923. The legal basis had previously been created with an amendment to the law on private insurance companies published on July 26, 1923 . The reason for the prohibition was that policyholders were treated unequal if individual customers were granted special payments at the expense of the other policyholders. It was assumed that increased commission levies as a result of the resulting commission driving would make insurance products unnecessarily expensive overall.

The ban was extended to life insurance on March 8, 1934, and to health insurance on June 5, 1934.

In the Federal Republic of Germany, the prohibition of commission submission for property insurance was regulated until June 30, 2017 in the Ordinance on the Prohibition of Special Payments and Beneficial Agreements in Property Insurance of August 17, 1982. This also included credit and surety insurance, accident insurance and legal expenses insurance. The notices from 1934 initially continued to apply as federal law. The 1982 ordinance and the 1934 notices were repealed on July 1, 2017.

With the new regulation, the prohibition of commission payments will be anchored in the Insurance Supervision Act in a legally secure manner at the simple statutory level. An authorization to issue ordinances is no longer required.

meaning

Insurance sales commissions

An insurance intermediary, such as B. an insurance broker according to § 34d GewO, usually receives a commission from the insurance company for its activity as an agent. This commission can amount to several thousand euros once when concluding old-age provision contracts or full health insurance.

For property insurance, the commission is paid depending on the company in the form of an increased final premium and / or annually as a percentage of the premium.

Relevance to the consumer

The inconspicuous-looking prohibition of commission payments means that - unlike in most other industries - no discounts may be granted on the sales margin to consumers. It thus restricts an essential element of free competition and protects product margins on the supplier and intermediary side.

Penalties for violation

A violation of the prohibition of commission payments is an administrative offense and can be punished with a fine of up to 50,000 euros in accordance with Section 332 Paragraph 1 No. 2a, Paragraph 5 VAG.

The Federal Financial Supervisory Authority (BaFin) is responsible for prosecuting this regulatory offense for insurance companies in accordance with Section 36 OWiG in conjunction with Section 333 VAG . For the sanctioning of violations by intermediaries according to According to § 144 Abs. 2 Nr. 7, § 34d Abs. 1 Sentences 4 and 5 GewO, the relevant state authorities are responsible, e.g. chambers of industry and commerce (IHKs). BaFin is in close contact with the IHKs through the German Chamber of Commerce and Industry (DIHK) so that uniform administrative action is guaranteed when interpreting the ban on special remuneration and commission levies and the sanctioning of violations . This is to prevent facts from being assessed differently in legal terms and from mediators and insurers being treated differently for no objective reason.

Criticism of the commission tax ban

Insurance broker associations (with the exception of the AfW) and insurance companies argue that the maladministration arises from the fact that insurance brokers are caused by commission payments to policyholders to make ever higher commission demands. This could result in the general premium level rising. This would put consumers at a disadvantage. The Frankfurt Administrative Court, which ruled against the prohibition of commission payments in 2011, saw things differently: Other insurance intermediaries, especially digital business models such as moneymeets.com and clark.de, rely on this argumentation and argue that competition is distorted to the detriment of consumers if prices ( Commissions) are fixed. This is a question that arises time and again between insurance brokers who return commissions and those who want to keep the ban on commissions. Most recently, the Cologne Regional Court ruled on October 14, 2015 Az. 84 O 65/15 in a competition law proceeding between the insurance broker at the expense of Broker Banditt in favor of the internet broker moneymeets.com that it was lawful to return commissions to customers and referred to the judgment of the Frankfurt Administrative Court.

There were no commission tax bans in neighboring European countries. The European Court of Justice confirmed the compatibility of this prohibition with the law of the European Community by judgment of November 17, 1993 (VerBAV 1994 p. 81 ff.). However, in a later judgment (2011), the Frankfurt Administrative Court came to the conclusion that the prohibition of commission payments was contrary to the constitution: On October 24, 2011, the Frankfurt Administrative Court declared the prohibition on commission payments to be too indefinite in a final judgment in one individual case. After this ruling, the Federal Financial Supervisory Authority (BaFin) initially filed a leap revision, but then withdrew it on February 29, 2012, so that the ruling became final. The background to the lawsuit: A financial broker from the greater Stuttgart area wanted to give insurance companies discounts on acquisition costs, which he was prohibited from doing. That's why the financial intermediary got the ball rolling with the lawsuit and called the rule into question.

The main criticisms of the prohibition of commission payments are (I) the restrictive effect on competition and (II) the support for the commission-based control of the financial advisor. (I) The elimination of discount options means that the insurance intermediary has few opportunities to gain competitive advantages through flexible pricing. This severely restricts pricing based on supply and demand at the final sales level. (II) The commission protection inhibits the actually more consumer-friendly sales principle of fee advice. In the case of fee-based advice, the insurance broker is remunerated via a product-independent advice fee. This means that the advice is no longer influenced by the monetary aspect of the commission. The commission tax ban should only apply to brokers, intermediaries and insurance companies.

For some time now, consumer advocates have been calling for the promotion of fee-based insurance sales and a direct abolition of the ban on commission payments. The Federal Minister for Food, Agriculture and Consumer Protection, Ilse Aigner , also shares the criticism on key points.

The Federal Cartel Office also considers the current ban to be unlawful. The authority is of the opinion that the ban on reimbursement violates European law.

In the course of a consultation process by BaFin, in which associations, among others, were able to submit their comments, the financial broker AVL, as the trigger for the debate, raised massive criticism of the Federal Association of Insurance Merchants (BVK). The BVK had justified the prohibition of the provision of commissions, among other things, by stating that cross-subsidization through commissions would be necessary for intermediaries. The high commissions from life insurance, for example, would obviously be used to help finance advice in other areas, criticized AVL and quoted the Stuttgart lawyer Dr. Andreas Sasdi with the words, but that is exactly what is “inadmissible because of the requirement to separate sectors in insurance law”.

Legal alternatives

The tipster model

The so-called tipster model is a legal possibility for agents to give some of their commission . Each agent can give a contact agent who names a prospective customer part of his commission for referring the customer. Tip providers can also be relatives or friends of the customer. So far, this option has rarely been offered proactively because it directly reduces sales revenue and, due to a lack of awareness, there is hardly any demand on the consumer side. Some internet portals now offer this service.

Return of commissions to customers

Based on the judgment of the LG Cologne (against the broker association IGVM), the internet broker moneymeets pays back 50% of the commission received to customers. The internet broker AVL pays back 90% of the front-end load for certain types of unit-linked life insurance (based on the judgment of VG Frankfurt against BaFin). Internet broker Clark has announced that it will repay 50% of its commissions.

literature

Gerrit Winter: The commission tax ban in life insurance - limits and effects under civil law. In: VersR . Vol. 53 (2002), 25, pp. 1055-1066.
Christian Caracas: Does the ban on special remuneration under Section 48b VAG also apply to corporate customers? In: Corporate Compliance Zeitschrift (CCZ) issue 1/2019, p. 39 ff.

Web links

Consultation 01/2018: Notes on insurance sales BaFin, January 15, 2018

Individual evidence

↑ OJ. L 26/19 of February 2, 2016

↑ EU Insurance Distribution Directive (IDD) Gabler Insurance Lexicon , accessed on August 1, 2018

↑ BGBl. I p. 2789

↑ Act to implement Directive (EU) 2016/97 of the European Parliament and of the Council of January 20, 2016 on insurance distribution and to amend other laws DIP , ID: 18-79551

↑ Prohibition of commissions by the IDD anchored in law AssCompact, July 3, 2017

↑ Circular 11/2018 on cooperation with insurance brokers and risk management in the sales BaFin website, July 17, 2017

↑ Claus-Peter Meyer: Bafin limits commission levy ban VersicherungsJournal.de, July 24, 2018

↑ Publications of the Reich Supervisory Office for Private Insurance (VerAfP) 1924, p. 22

↑ RGBl. 1923 I p. 684 f. Art. I No. 9

↑ available (not barrier-free) under consultation 4/2012 - future of the ban on granting special allowances and the conclusion of beneficiary agreements. BaFin , April 26, 2012, accessed on August 2, 2018 .

^ Ordinance on the prohibition of special payments and preferential contracts in property insurance

↑ Art. 5 of the ordinance repealing ordinances under the Insurance Supervision Act of 16 December 2015, Federal Law Gazette I p. 2345

↑ Draft law of the federal government for a law to implement Directive (EU) 2016/97 of the European Parliament and of the Council of January 20, 2016 on insurance sales and to amend the Foreign Trade Act BT-Drs. 18/11627 of March 22, 2017, p. 40 f.

↑ More on the subject of commissions ( Memento from June 1, 2009 in the Internet Archive )

↑ Olaf Temmen: Insurance sales: The ban on special remuneration and commission levies from the point of view of the BaFin website of BaFin, October 16, 2017

↑ Consumer protection, d. H. In any case, the prohibition of special payments cannot serve the rights of insurance customers and the transparency of the market in an appropriate manner, as it affects the insurance intermediaries.