7.8 Premium adjustment, Legal Expenses Insurance, Basis Plus

7.8.1 Why do we adjust the premium? The premiums are your consideration for our promise of benefits. We need the premiums so that we can meet our obligations to pay in all insured claims. We therefore check annually whether the premium needs to be adjusted because of a change in the claims requirement. The determination of the change value (see 7.8.2) may result in the premium being increased or reduced or remaining at its previous level.

7.8.2: same wording in Legal Basis, clause 7.8

7.8.2.1 Statistical determination by an independent trustee. An independent trustee determines a change value for the premium adjustment by 1 July of each year. In doing so the trustee bases the determination on the data of as large a number as possible of companies offering legal expenses insurance, so that the value determined reflects the entire legal expenses insurance market as well as possible. The determination of the change value is based on the following question (calculation method): By what percentage has the requirement for payments (that is, the product of claims frequency and the average of claims payments) in the last calendar year increased or decreased compared with the calendar year before last (reference years)? (The claims frequency of a calendar year is the number of insured events reported in that year, divided by the number of risks insured on annual average. In other words: the claims frequency indicates for what percentage of the insured contracts a claim has been reported. To calculate the average of claims payments of a calendar year, all German law applies to the contract. The German wording of the conditions alone is binding; this translation is provided for understanding only. insured events settled in that year are considered. The total of the payments made for these insured events is divided by their number.) The trustee takes into account changes resulting from improvements in benefits (for example: inclusion of a new type of cover) only if the improvements in benefits formed part of the scope of benefits in both comparison years. The trustee determines the change value separately for the following contract groups:  traffic legal expenses cover, Within each contract group, the change value is determined separately for contracts with and without a deductible. The change values so determined apply uniformly to all contracts with or without a deductible combined in the group. The trustee rounds a change value not divisible by 2.5 down to the next lower positive number divisible by 2.5 (for example, 8.4 per cent is rounded down to 7.5 per cent) or up to the next higher negative number divisible by 2.5 (for example, minus 8.4 per cent is rounded up to minus 7.5 per cent). Change values in the range from minus 5 per cent to plus 5 per cent are not rounded.

7.8.2.2 Determination on the basis of the company's own figures. On the basis of our company's own figures, we determine the change value individual to our company by 1 July of each year. In doing so we apply accordingly the rules applicable to the determination by the independent trustee (see 7.8.2.1).

7.8.3 Which change value is decisive for the premium adjustment? Principle: for the premium adjustment (increase or reduction), the change value determined by the independent trustee is decisive in principle (see 7.8.2.1). Exception: we compare our company specific change value with the value determined by the trustee under 7.8.2.1. Our company specific value is then decisive for the premium adjustment if this comparison shows  that our value is below the value determined by the trustee, and  that this was also the case in the last two calendar years in which a premium adjustment was permissible. The calendar years to be considered need not necessarily follow one another directly.

7.8.4 No premium adjustment No premium adjustment is made if the change value determined by the independent trustee (see 7.8.2.1) is less than plus 5 per cent and greater than minus 5 per cent. This change value is taken into account when determining the conditions for the next premium adjustment. (This is done by retaining the reference year until the 5 per cent threshold is reached. The requirement for payments of the respective previous year is always compared with the requirement for payments of the "retained" reference year.) Irrespective of the amount of the change value, no premium adjustment is made for contracts for which 12 months have not yet elapsed since the start of the insurance.

7.8.5: same wording in Legal Basis, clause 7.8

7.8.6 When does the premium adjustment take effect? The premium adjustment takes effect at the beginning of the second month following our notification of the premium adjustment. It applies to all premiums falling due after our notification from 1 October inclusive. In the notification we draw your attention to your extraordinary right of cancellation (see 7.8.7).

7.8.7 Your extraordinary right of cancellation German law applies to the contract. The German wording of the conditions alone is binding; this translation is provided for understanding only. If the premium increases, you may cancel the insurance contract with immediate effect. You may, however, cancel at the earliest as at the time at which the premium increase takes effect (see 8.8.5). Your cancellation must reach us within one month after our notification of the premium adjustment has reached you. (The German original refers here to 8.8.5, which does not exist; the time at which the adjustment takes effect is governed by 7.8.6.) If the premium increases solely because of an increase in insurance tax, you have no right of extraordinary cancellation.