While the Court took the view that insurance comparison websites need to be more proactive, it at the same time confirmed that insurance can be mediated in a compliant manner exclusively online.
On 13 July 2016, the Munich District Court I announced its judgment in the matter BVK vs. Check24. The BVK is a Federal Professional Association of Insurance Intermediaries, Munich-based Check24, being regulated as an insurance broker, operates an insurance comparison site. BVK had contended that Check24 did not properly inform prospective customers of their exact status nor advise them in line with the insurance mediation regulations; they filed suit in 2015.
The Court held that insurance brokers – unlike direct insurers for whom a legal exception applies (s.6(6) of the German Insurance Contract Act) – are generally not exempt from the duty to advise customers in case of pure internet (distance) sales. While the Court in fact required Check24 to be more proactive:
- by disclosing spontaneously to the website user their exact status as insurance broker;
- by inquiring, though online, in more detail about the customer’s needs;
it also held that the necessary advice can - and has to - be given via the internet, if only the relevant questions are posed to the customer and the selection of insurance policies is adequate. Specifically, comparison sites are allowed to work with standardized lists of insurance tariffs as the basis for their advice. However, the Court criticised that Check24’s status information was “hidden” behind a button in the footer of its webpage, and that they offered information on certain coverage aspects only upon request rather than by proactively asking for related customer needs. In the case at hand, the issue was a sublimit for private community service.
Check24 commented that it welcomed the decision and would have to adapt its web offering only marginally, BVK referred to the judgment as a “victory for consumer protection”.
The judgment (ref. 37 O 15268/15) is not yet binding, parties have one month to assess merits of appeals. If it becomes binding, the judgment could – subject to a closer review of its grounds which are not yet available – serve as a more reliable basis for the internet distribution of insurance products by direct insurers, intermediaries, banks and retailers who frequently offer insurance as an add-on to products like cars or consumer electronics and services like travel or consumer credits.