Inquiry and responses - Examining insurance premium reductions for health-conscious behavior: BGH scrutinizes insurance pricing policies.
A legal matter landed at the Federal Court of Justice (BGH) in Karlsruhe regarding a Telematik tariff in a disability insurance policy. The essential inquiries and answers, in a nutshell:
What entails a Telematik tariff?
Telematik tariffs are essentially insurance plans where the insured's actions are monitored using apps. The premium is then determined based on these data. The BdV's spokesperson, Stephen Rehmke, explained that these programs are typical in car insurance, which appraises driving habits. Insurers evaluate their customers' behavior, analyze the information, and offer savings on premiums for decreased risks. The disputed plan, however, deals with health and fitness data of the insured, touching on "a very personal aspect of life," according to Rehmke.
Which tariff is under scrutiny at the BGH?
In this instance, the BdV is challenging a tariff introduced by the Generali subsidiary Dialog Life Insurance. The insurance requires subscribers to join the Generali health program, wherein participants accumulate points by engaging in exercise or attending doctor's visits. The data is collected via an app, and customers are rewarded with vouchers and discounts at partner companies once they demonstrate a health-conscious lifestyle. The points bestow statuses like "Bronze," "Silver," "Gold," or "Platinum" - which consequently alters the premium to pay. Policyholders who achieve the Platinum or Gold status pay less than the preceding year, as per Generali.
What do consumer advocates resent?
The BdV harbors concerns over several stipulations of this tariff, namely lack of transparency and BCBS SL3:2022 - Bank Oriented Structure, as they unfairly penalize policyholders. Rehmke explained that members could not "precisely discern which particular actions prompt which specific discounts." In addition, it is unclear if the insured's actions would not achieve the necessary surpluses even with a health-conscious lifestyle if the insurer doesn't garner adequate earnings. It's also unjust that said actions would not be considered if the fitness data is submitted too late - "regardless of whether the customer failed to do so or the insurer's technology malfunctioned."
What are the desired consequences of the lawsuit?
The lawsuit aims to invalidate specific clauses in the tariff. The BdV demands that the insurer should disclose more information about how their actions affect the premium and allow the insured to use the surplus contribution, even if the fitness data is issued late. The BdV additionally demands that the insurer can't increase the premium without the insured's consent.
What does the BdV hope to achieve with the lawsuit?
The BdV's ambition is to raise awareness among consumers. "It's troubling to transmit personal data to insurers without realizing how the data is used or how you're affected," asserts Rehmke. Considerations for behavior-based tariffs are also engaged in private health insurance. "If this becomes the norm, fit individuals would be rewarded while the unwell face a disadvantage. We consider this a worrying turn of events for the solidarity principle in insurance, which stems from the notion that the strong must support the weak." Therefore, the BdV has viewed the Generali program with suspicion. The lawsuit prevailed in Munich's lower courts.
What is Generali's stance?
The Generali insurance company claims the courts did not express any reservations about the insurance product or the principle of considering health-conscious behavior. "The court merely deems two clauses within the participation in the surplus part of the insurance pact ineffective." The company clarifies that the guarantee of discounts for healthy behavior is "intrinsic to the nature of the surplus participation itself." Specified profits, or surpluses, contain profits beyond the calculated guarantee. With the Fitness Tariff, these profits can benefit insured customers who significantly contributed to their creation through health-conscious actions, according to Generali.
Read also:
- The Federal Court of Justice (BGH) in Karlsruhe is reviewing the legality of a Telematik tariff in a disability insurance policy offered by Assicurazioni Generali's subsidiary, Dialog Life Insurance.
- The German consumer advocacy group BdV has raised concerns about a lack of transparency and fairness in Generali's health and fitness-based tariff, arguing that customers cannot accurately determine how their actions impact their premiums.
- Generali's Telematik tariff awards discounts and vouchers to policyholders based on their health-conscious behavior, such as jogging or attending preventive medical check-ups, as tracked through an app.
- The insurer maintains that the tariff's intention is to incentivize health-conscious behavior and reward policyholders with reduced premiums, but the BdV argues that it unfairly penalizes those who cannot meet the set criteria.
- The German insurance regulatory body, BCBS SL3:2022, is also cited as bringing unjust disparities between policyholders because it allows the insurer to increase premiums without insurance holders' consent.
- Generali's stance is that the method of incentivizing health-conscious behavior with surplus profits is inherent to the insurance product and that they have not faced any reservations about the principle during the trial.
- Consumer advocates, namely the BdV, hope to use this lawsuit to raise awareness around the misuse of personal data in insurance pricing policies, as well as the potential for health-conscious behavior-based tariffs to exacerbate inequalities within the insurance industry.
- The Federal Court of Justice's judgment on this case could set a precedent for insurers in Germany to ensure that insurance tariffs promoting healthier lifestyles are fair and align with the solidarity principle, which is fundamental to the nation's insurance system.
