Code of Conduct

DR-WALTER Code of Conduct for the Distribution of Insurance Products

General information

For consumers, insurance coverage is an important part of their everyday lives and thus part of their basic needs. For this purpose, the insurance industry offers a variety of products tailored to the needs of consumers. Insurance coverage requires a great deal of explanation and is characterized by a special relationship of trust. As a result, insurance companies are assuming a major responsibility toward their customers and society in general.

The distribution of insurance policies is the link between insurance companies and customers. In addition to a high product standard, an essential prerequisite for customer satisfaction is a high quality of consulting and sales. Ensuring the quality of products and sales services is in the interest of insurance companies and insurance sales alike.

Integrity and commitment to the principles of honorable business, along with excellent qualifications, are the basis of any business relationship. Insurance companies that work with insurance intermediaries to sell their products will ensure that the intermediaries are qualified, reliable, and have an excellent reputation. They do not work with consultants or intermediaries of any kind who keep the customer in the dark about their status or even deceive them. In direct sales, they only work with comparison portals that make it clear to the customer which companies are being used for comparison, so that customers are not misled about the informative value of the comparison.

The legislator has established far-reaching regulations for consulting and sales in the insurance industry and set standards in the financial services sector. This Code of Conduct presents the standards of behavior for the distribution of insurance products in a transparent manner and establishes a framework of norms and values for insurance companies to ensure that they meet the interests of their customers. These apply to all forms of insurance sales.

Insurance companies shall take the necessary measures to anchor the rules of this Code in the principles of their own company. It is the responsibility of the insurance companies to define and specify the rules and develop suitable criteria for their individual companies.

1. Straightforward and easy-to-understand insurance products – information about potential future total benefits is based on standardized and fair procedures

The key features of the insurance product – including any exclusion of benefits that is significant to the customer – must be presented to customers in a straightforward and easy-to-understand manner. With the help of this information, customers can make an informed decision. Information on potential future benefits, particularly in the area of long-term pension schemes, such as assumptions on the development of the capital market and the development of returns on a product, must be presented in a transparent and plausible manner using standardized methods accepted throughout the industry.

All consulting and mediation services will focus on the needs of the customer

Insurance coverage is a matter of trust for consumers. In order to maintain this trust, insurance companies will focus on the needs of the customers and place them at the center of their actions for the distribution of insurance products. Considering the legitimate interests and wishes of customers takes precedence over the interest of the sales partners in earning a commission.

Sales management supports the provision of needs-based consulting services. The insurance intermediary identifies, structures, analyzes, and evaluates the customers’ wishes and needs for insurance coverage. After discussing a product with the customers, the insurance intermediary recommends a product in a manner that they can understand.

3. Compliance

Insurance companies are adopting compliance rules for their employees and intermediaries.

Such regulations need to include in particular the following: outlawing corruption and bribery; clear rules for dealing with gifts and invitations and other benefits; clear rules relating to advertising measures and corporate events; and regulations to avoid conflicts of private and business interests. They also define clear rules for handling personal and confidential data and for compliance with data protection and competition law regulations.

Documentation of all consulting services at the conclusion of a contract

Proper documentation of a legally required consulting session is of particular importance. Insurance companies and their intermediaries take particular care in this regard. The resulting document shall be handed over to the customer during personal consultation in case of conclusion of a contract. It should be noted that the legislator has provided for the possibility of waiving documentation as an exception.

5. Advising customers even after conclusion of the contract

Providing policyholders with advice and support in accordance with their wishes and needs is the basis for sustainable customer relations, even after the contract has been concluded. For this reason, if the policyholder’s need for advice or support is apparent, such advice or support shall also be provided after the conclusion of the contract during the term of the insurance contract, in particular in the event of a claim.

6. In the case of solicitation and transfer of insurance contracts, the customers’ interests must be taken into account

The solicitation of insurance contracts is only permitted by competitive means. Customers shall be asked about existing insurance contracts. Particularly in the area of life and health insurance, solicitation of insurance contracts can often be associated with considerable disadvantages for customers. In any case, customers must be specifically informed about any disadvantages. This is part of the consulting documentation.

7. Straightforward and unambiguous legitimacy of agents, brokers, and consultants when dealing with customers

All intermediaries must clearly and unambiguously disclose their status to the customer upon initial contact without being requested to do so. Insurance agents must inform customers of the insurance company or companies commissioning them or the sales organization on whose behalf they are acting.

8. High importance attached to the qualifications of insurance intermediaries

The insurance companies shall ensure high-quality training of the intermediaries. They shall cooperate only with qualified intermediaries of impeccable reputation. Obtaining information from the Information Office for Insurance Sales Representatives and Brokers (AVAD) is mandatory.
In addition to the legally required qualification of freelance insurance intermediaries, the insurance companies have undertaken in the collective agreement to also qualify employed sales representatives through an examination by the German Chamber of Industry and Commerce (IHK). Continuous training of insurance intermediaries is standard in the insurance industry. Insurance companies only work with insurance intermediaries who undergo regular further training and provide the respective proof.

9. Additional remuneration with insurance brokers

Agreements between insurance companies and insurance brokers on additional remuneration depending on revenue, i.e., remuneration above and beyond the contractual brokerage agreement, may affect the independence of the insurance broker.
Such agreements must not adversely affect the independence of the broker and the customers’ interest.

10. Reference to the existing ombudsman system for insurance companies

There is an ombudsman system in the insurance industry. With this system, the industry offers its customers an independent, non-bureaucratic system for resolving disagreements with insurance companies and insurance intermediaries.

The customers must be made aware of the existing ombudsman system in an appropriate form.

11. Binding character of the code and evaluation

The member companies of the German Insurance Association (GDV) are committed to this Code and make it binding for themselves and the relations with their sales partners. They only work with sales partners who recognize and practice these principles as minimum standards. They will take the necessary measures to anchor the rules of this Code in the principles of their own company.

The member companies declare their adherence to the Code to the German Insurance Association (GDV). The GDV then publishes the names of the insurance companies that recognize this Code as binding for them on its homepage and in its annual report.

The insurance companies that recognize the Code as binding undergo an audit every two years by an auditing company or an auditor. The audit may relate to the appropriateness or effectiveness. The object of the audit is to determine whether the insurance company has incorporated the provisions of the Code into its own regulations and, in the case of the effectiveness audit, also practices them.

The German Insurance Association (GDV) will publish the author of the audit certificate and the date of the last audit on its homepage in the list of insurance companies that have joined it. Insurance companies that do not provide proof of an audit every two years will be removed from the list. Further details shall be regulated by a procedural rule to be adopted by the Presidium.