On the practice of customer protection in insurance companies

October 27, 2020 – Volume two of the series on private insurance law from Linde-Verlag is about customer protection. Examples from the case law, the possibilities that the supervisory authority has in this area, the role of the insurance broker and alternative ways of dispute resolution are presented.

New at Linde: customer protection
in private insurance law.
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(Cover: Linde).

Volume II of the book “Kundenschutz im Privatversicherungsrecht” has been published by Linde-Verlag in the series “Writings on Private Insurance Law”. The editor is Michael Gruber, Professor of Corporate Law at the University of Salzburg.

Gruber is also the head of the Research Institute for Private Insurance Law. The book contains contributions from a conference held by this institute in autumn 2020.

According to Gruber, the importance of material customer protection in both Austrian and German insurance contract law made it necessary to take stock of the situation with regard to customer protection in private insurance law.

Central needs

Manfred Wandt, Professor at the University of Frankfurt, deals in detail in the introductory chapter with the central customer protection needs and protective instruments in private insurance law.

Following the definition of the term “customer”, customer protection is dealt with in supervisory and distribution law as well as in insurance contract law.

Necessities with regard to closing gaps, further development and good legal technology are also presented. Finally, Wandt also deals with the principle of proportionality, in particular with regard to the costs of protective measures.

Examples from case law

Johann Höllwerth, Judge at the Supreme Court, uses examples to show customer protection in case law, whereby he devotes more space to withdrawing from life insurance.

Although there is no provision in the law that generally mandates the courts to protect insurance customers, customer protection has a clear significance in court practice, according to Höllwerth.

In his contribution he goes into the various possibilities of protection through the interpretation of Community and national law, through contract control and contract interpretation by the judiciary.

Financial regulator protection

Stephan Korinek, Head of Department at the Austrian Financial Market Authority, deals with the sub-areas of financial supervision, conduct of business supervision and governance supervision in his article “Protection of the insured by supervision”.

Korinek investigates the questions of how far insurance protection is a goal of supervision, which interests of the insured are protected and which possibilities of supervision are available.

From the broker’s point of view

Klaus Koban, Managing Director of the Koban Südvers Group, and lawyer Lukas Schmid, in the article “Customer protection in sales using the example of the insurance broker”, discuss the relationships between the customer and the broker and the insurer as well as the broker’s liability.

According to the authors, the high requirements and comprehensive obligations for insurance brokers would offer the customer the best possible protection. In addition, customer protection has been expanded and strengthened by the new EU regulatory regime.

A checklist for the advisory process is also provided, which includes the information and documents prior to the conclusion of the contract, the advisory protocol, additional requirements for insurance investment products and follow-up and follow-up advice.

Alternative concepts

Finally, attorney Felix Hörlsberger presents “Concepts of alternative dispute resolution” and goes into, among other things, regulatory complaint procedures, mediation and arbitration as well as the legal service and arbitration board of the professional association.

The development of new concepts has progressed over the past few years and one almost gets the impression that the legislature is increasingly relying on such concepts to relieve the judiciary, according to the author.

He notes critically that many of these concepts cannot bring about a final solution to a conflict and that not every concept is a suitable alternative for every dispute.

The book

“Customer protection in private insurance law”

• Ed .: Michael Gruber
• 2020, Linde Verlag Ges.mbH Vienna
• 122 pages
• ISBN: 978-3-7073-4298-7
• Price: 36 euros
• Link to Product page at the publisher with ordering option

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