Insurance tariff

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An insurance tariff is an insurer's pricing system . It is a technical term and it is usually not a tariff in the legal sense, as it does not bind the insurer to the outside world. Insurance tariffs in the insurance industry therefore do not represent a binding offer to conclude a contract for everyone , but are only internal requirements of the management for the contracts to be concluded by those commissioned with them. Insurers are usually free to decide whether to conclude or reject contracts under these conditions or to agree other conditions. However, there are legal limits to this. Usually, an insurer creates such an independent insurance tariff for each group of similar insurance contracts ( referred to as a product in the technical jargon of the insurance industry ).

In some cases, however, there are also tariffs from a legal point of view when conditions are bindingly offered to policyholders of existing contracts, very rarely to the public. So there are z. B. in the car insurance a tariff that describes the contractually binding conditions in the event of a vehicle change. These tariffs are binding for the insurer because they become part of the contract. They regulate the following contract changes in a binding manner.

Purpose of the insurance tariffs

Insurance contracts are by their nature products that must be concluded in large numbers in order to perform their function. Because with insurance, the individual risk is combined with other similar risks in a portfolio and, based on mathematical principles , the overall risk for the insurer is significantly lower than it was for the individual policyholder . Therefore, insurers must conclude insurance contracts as uniformly as possible so that the risks assumed are very similar. To this end, for all contracts using the insurer a kind of uniform insurance conditions , so uniform contractual arrangements. In order to be able to conclude contracts in bulk, all other contractual provisions, in particular the contributions and the resulting entitlements to benefits , must be specified in advance by the management as instructions for the persons responsible for concluding contracts. The definition of the insurance tariff is called tariff classification . Given the large number of degrees, it is usually not possible to determine the contributions individually. Only in a few commercial branches of insurance or in the case of unusual major risks is an individual premium set (individual tariff). In addition, the insurer with the application of a uniform insurance tariff on all contracts and compliance with various regulations sure how this equal treatment requirement of § 138 para. 2 Insurance Supervision Act (ISA) and the General Equal Treatment Act (AGG). In the case of individual tariffs, these requirements must be particularly observed. The specification of an insurance tariff also ensures that the contracts are concluded in the form desired by the management, in particular with economically sufficient contributions. The agreement of sufficient contributions is z. B. Mandatory for life insurance contracts according to Section 138 (1) VAG .

Life insurance

Diversity of insurance tariffs

Usually there is a separate insurance rate for each product; so offer life insurance companies typically offer rates for pension insurance , term life insurance , term life insurance , disability insurance etc. But there are also special tariffs for certain customer groups or sales channels possible. Alternatively, comprehensive insurance tariffs provide special regulations for various cases.

Insurance tariff and contract

In life insurance, the insurance tariff is not part of the contract, but according to Section 1 Paragraph 1 No. 6 of the VVG Information Duty Ordinance (VVG-InfoV), the policyholder must be informed of the tariff provisions that are to apply to the contract, as otherwise they would not be part of the contract . Insofar as this does not contradict statutory provisions such as the AGG or the principle of equal treatment, the insurer is free, in individual cases, in particular for risk reasons, to refuse to conclude a contract under the conditions of the insurance tariff or to make changes. This is usually done in connection with the risk assessment based on particular health or economic risks. The insurance tariff is also not decisive for changes to the contract. Insofar as the contract provides for certain design rights for a party, the provisions for this must be agreed in the contract. For example, the calculation bases for the premium calculation, with which a premium exemption is to be carried out, must be agreed in the contract. Internal documents of the insurer, such as the insurance tariff, are not relevant without a contractual agreement.

Tariff

Since insurance tariffs in life insurance today are exclusively an internal organizational tool of the insurer and have no legal significance without a contractual agreement, the insurers are completely free to design them. Many insurers today still organize insurance rates similar to the earlier of completed pre-1995 contracts by the supervisory authority broadly defined business plans . Therefore a description is possible for these, but this is not generally valid. Until 1994, insurers were obliged to set out their tariff bases in their business plan and to have this approved by the BAV . The tariffs are therefore largely designed according to the wishes of the supervisory authority. They are standardized to make the work of the supervisory authority easier, but above all to be able to meet the prohibition of arbitrariness . In its periodical publication, the supervisory authority published so-called model business plans, which to a large extent still describe the principles of current insurance tariffs today. Since 1995 there is no longer any need for a permit. The mathematical basis of the premium calculation is to be communicated to the supervisory authority according to §§ 143 and 161 Abs. 2 VAG.

Usual components of an insurance tariff

The details of the life insurance contracts to be concluded in insurance tariffs include

  • to be used in the calculation of contributions discount rate ,
  • the mortality tables to be used ,
  • the amount of the closing and administrative costs to be included,
  • the formulas to be used,
  • the basis for calculating the surrender values to be agreed and non-contributory sums ,
  • The cancellation discount to be taken into account and also to be agreed,
  • Restrictions on entry age, duration and sum insured,
  • the insurance conditions to be used , in particular the general insurance conditions,
  • other details of the contract.

Insurance tariffs and actuarial reserves

The insurance tariffs often also provide technical specifications for the assessments in the context of the annual financial statements . Except for contracts concluded before 1995, these are not binding; Rather, the commercial law regulations are binding . The management preparing the annual financial statements is not bound by the insurance tariff for the preparation of the annual financial statements. The annual financial statements must be prepared in accordance with commercial law, whereby the actuary responsible has to confirm under the balance sheet that the actuarial reserve has been set up in accordance with the relevant statutory provisions. The insurance tariff does not matter here. Commercial law only provides that the business plans are relevant for the valuation of technical provisions for contracts concluded before 1995 , insofar as these result in sufficient caution from a commercial law perspective.

Other lines of insurance

The insurance tariffs in health insurance and car insurance are still subject to extensive state controls. The same applies to the insurance tariffs of pension funds .