An insurance agent's contract of the Allianz Insurance Group contained the following provision:
'With the termination of this contract all claims for client-service-commissions or other claims against the company shall expire.'
In the case at hand the agent terminated the contract himself. Nevertheless, he demanded follow-up commission payments for the insurance contracts he has acquired during the agency contract according section 8 para. 2 Austrian Act on Agencies. He filed for the respective book extract (action for accounting). Allianz objected that the agent had terminated the contract himself, in other words the termination depended on his own will. Since he terminated the contract without any reason he would not be entitled to indemnity for the loss of costumer stock and consequently he also has no claim for further commissions.
The courts of lower instance and the Austrian Supreme Court saw this differently. In its decision 3 Ob 138/14m dated October 22, 2014 the Supreme Court held that the agent was disadvantaged particularly because he would neither receive indemnity nor follow-up commissions due to the (groundless) self-termination of the agency contract. The contract provision in dispute is therefore one-sided, unfair and against bonos mores.
In conclusion the insurance agent has a claim for follow-up commission payments despite the renunciation-clause. This also applies if the agent terminated the contract himself and for the time the respective insurance contracts are still in force.
In this context some questions arise: what should apply in case of the insurance companies´ ordinary termination by complying with the period of notice? A point of further discussion is an immediate termination by the insurer. In my opinion, the decision of the Austrian Supreme Court applies also in this case: the immorality of the commission renunciation clause must be considered ex ante. According to the ruling of the Supreme Court such a clause is (and remains) immoral.
The ruling of the Supreme Court can be considered as a landmark decision, strengthening the rights of insurance agencies. In practice it has already led to a positive impact on some pending cases.
Does the Supreme Court decision 3 Ob 138/14m also apply to commercial agents? The Austrian Supreme Court applied section 8 para. 2 HVertrG – the general provision regulating sales agents’ commissions – and not the specific rule of section 26c para. 1 HVertrG regarding insurance agents (in force since January 1st, 2007). Consequently the judgement also applies to sales agents.
However the expectations of a commercial agent for the time after contract termination must be taken into account. The Austrian Supreme Court did not consider a specific loss regarding the agent’s commissions as relevant. However the types and duration of contracts acquired by the commercial agent must be taken into consideration to achieve a comparable situation with insurance agents. If comparable, the decision of the Supreme Court should also apply to commercial agents.
Gustav Breiter, IDI agency & distribution country expert for Austria