Austrian Insurance Broker Act (Maklergesetz)

Subject matter

The Broker Act defines the insurance broker as a fiduciary of the client who, unlike the tied insurance agent, is not bound to a particular insurer and does not act as the insurer’s representative but as the policyholder’s advocate. It specifically governs the duty to analyse client needs and provide ongoing servicing, documentation duties on conclusion and amendment of contracts, the duty to forward declarations between the parties, and the broker’s liability for advisory errors.

Distinction from the agent and relation to the IDD

While the insurance agent acts in the name and interest of one or several insurers and is their auxiliary, the broker acts exclusively on behalf of, and in the interest of, the client; this separation of roles is independently codified by statute in Austria, unlike in many jurisdictions that lack a dedicated broker act. The Broker Act is supplemented by the trade-law provisions of the Trade Act (Gewerbeordnung) and by the requirements of the EU Insurance Distribution Directive (IDD), which sets uniform minimum standards for qualification, registration, and conduct of business across all distribution channels.

Relevance for insurance practice

The Act establishes heightened duty-of-care and advisory liability for insurance brokers, which in practice is regularly backed by mandatory professional indemnity insurance; breaches of the servicing or documentation duties can give rise to damages claims by the client against the broker, independent of any payment obligation of the insurer.