Commercial Agent's Compensation Claim

Concept

The compensation claim under § 89b of the German Commercial Code (HGB) is a statutory claim of the insurance agent against the insurer, arising upon termination of the agency agreement. It is intended to compensate for the economic benefit that the insurer continues to derive from the customer relationships built up by the agent even after the agent’s departure.

Requirements

The claim requires that the insurer continues to derive substantial benefits after termination from new customers acquired by the agent, or from significantly expanded business relationships with existing customers, and that payment of compensation is equitable considering all circumstances. The claim is excluded in certain cases, such as where the agent is responsible for a termination for cause.

Calculation and Cap

The amount of the compensation claim is based on the commission income earned in recent contract years from the acquired customer base and is statutorily capped at an average annual remuneration calculated over the last five contract years. This compensation claim is among the most practically significant disputes arising from the termination of intermediary relationships in the insurance industry.