The HDI checks the financial adequacy of the dynamic increases of the recent occupational disability insurance. If you have received a corresponding questionnaire, you can ignore it. Some questions have no legal basis.
For many years, HDI Lebensversicherung AG has offered very high quality insurance conditions in its EGO TOP tariff disability insurance (BU). On the one hand, it is very beautiful. On the other hand, as an insurer, you should also stick to it. That this is not always the case can be seen in the HDI’s previous handling of the financial adequacy review of dynamic increases.
Contribution dynamics and financial adequacy
A few years ago, the first insurers started taking the right to a review of the financial adequacy of their insurance conditions for contribution dynamics. Many have not noticed it, since it is precisely this form of dynamic to date, hardly any rating agency or consumer protection agency has looked at it more closely.
Contribution dynamics is one of the most important components of a good BU: it can ensure that the difference between income on days of good health and in the event of disability does not become too large without a new health check. Otherwise, inflation and rising income would lead to an ever-widening gap.
Since a BU contract has a duration of 30, 40, 50 years, the dynamic should also be offered for as long as possible. In some cases, however, this can lead to a completely different development: having more money on hand when you are unable to work than when you go to work. Unfortunately, this would motivate some people to want to stay sick rather than get well enough to work again – from the insurers’ point of view, this is a false incentive that absolutely must be avoided.
By having the right to review the financial adequacy of the dynamic, insurers seek to avoid such misleading incentives. In principle, you must indicate your income and the sum of all insured occupational and disability pensions. If both are in the right proportion, the disability pension can be increased.
Verification of the financial adequacy of the HDI
So does the HDI. If the sum of all the insured’s annual working and disability annuities is less than 65% of the last gross annual income from professional activity, financial adequacy is given. At least that’s the short form. In reality, the insurance conditions of the contracts we mediate are significantly broader. Because they distinguish the pensions of different strata and 65% only applies to annual incomes up to 84,000 euros. At this point, however, it shouldn’t get any more complicated than necessary.
It is much more important at this point that the insurance conditions describe exactly what is decisive for the financial adequacy test: the last annual gross income and the sum of the insured BU / EU pensions.
A few many questions in the questionnaire on the dynamics of HDI
To our amazement, the HDI has been sending out a rather large questionnaire for some time and this year it is doing more and more. In addition to the necessary and agreed questions, there are also questions about:
- gross income of the last 3 years;
- employment and activities learned before the current occupation;
- activities currently carried out and the previous duration;
- other activities besides work;
- Type of company, date of foundation, sector, number of employees in autonomous companies.
All this with the note that all questions must be answered truthfully and completely if you do not want to jeopardize your insurance coverage.
Intervention at the HDI
Of course: we did not find this insurer questionnaire correct. Because the questions go far beyond what the insurer has the right to ask their customers. We had to advise our customers not to fill out this questionnaire in this way.
Instead, we contacted the HDI, complained about the questionnaire and asked about the legal basis. The first reactions were rather reserved.
Statement by the lawyer Kathrin Pagel
We found the whole thing interesting enough to legally assess the situation. We then asked the lawyer Kathrin Pagel, a lawyer specializing in insurance law at the Michaelis Rechtsanwälte law firm in Hamburg, for an opinion. Among other things she writes:
“When examining the requirements for exercising a raise option, only information about policyholder data that may be relevant to the insurer’s decision to make a raise should be required and then legally collected. To the extent that the the insurer has provided for a specific verification for the exercise of this increase option, is bound by the framework conditions established by himself.
“Data collection cannot take place without a legal basis. In particular, however, the insurer’s right to ask questions does not go beyond the policyholder’s obligation to reply. If the contract specifies which specific information is relevant to the insurer’s decision, the insurer is also bound by it. In the context of contractual negotiations, there are obligations to inform about all the circumstances of essential importance for the conclusion of the contract (also BGH, judgment of 13 March 2008, III ZR 165/07). The insurer may also specify risk-relevant information to him in the form of the contract. If he does, the specification he made is binding. “
Mrs Pagel saw everything as we did. But of course legally justified. 😉 We were happy to make your statement available to the HDI. The result:
HDI gives up: questionnaires are no longer used
On Thursday 7 October 2021 there was a short friendly phone call with the HDI and then a corresponding confirmation:
- Financial adequacy questionnaires have not been sent out since last week.
- Customers to whom it has been written also do not have to respond.
- Dynamic increases in disability pensions will be implemented without a financial adequacy check until further notice.
- A new decision on the future course of action will be taken next year at the earliest.
We quote from the confirmation:
“Unfortunately, 14,000 letters were sent out last weekend. These were already created before we could disconnect from writing. If your customers are interested, you can ignore this and any letters you’ve already received. We are stopping all operations and letting the dynamics unfold as normal. “
Bottom line: what you can achieve as a small insurance broker
It is said that there are people who think that insurance brokers only have their commission in mind and therefore the conclusion of contracts. Indeed, many colleagues do the work, for example those in our professional association IGVM – much more: that is to say, making sure that customers remain well insured even after taking out the insurance. Be there for you in case of any damage. And again and again, in one form or another, report to insurers when something gets out of hand.
The question remains whether the policyholders have already suffered a disadvantage due to the questionnaire: for example, because the average income of the last 3 years was lower than the last annual income and the dynamic was therefore interrupted. Or why the questionable questionnaire was returned without being filled out. And can it have a negative impact on policyholders if, in the event of a claim, it turns out that one of the unjustified questions has not been answered correctly?
Either way, it’s gratifying that an insurer ultimately acted consistently and stopped the procedure. Many thanks to our contact person at HDI. We are all happier when the result is that not only our clients are treated fairly, but also everyone who has adequate disability insurance with HDI.
Addendum of October 18, 2021: Insurance tip reports
The versicherungstip (vt) of the Kapital-Markt Intern-Verlag reports offline and online under the entry After Helberg and the ‘vt’ criticism: HDI takes an exaggerated BU questionnaire from the market.