It’s important to us to explain the complex topic of the occupational benefit scheme as comprehensibly as possible. However, sometimes we cannot get around using technical terms. In our glossary we explain these technical terms briefly and in a reader-friendly manner.
General Conditions of Insurance
The General Conditions of Insurance (GCI) set forth in standard format the provisions of an insurance contract as they apply to all parties concerned. They form an integral part of the insurance contract. Insurance companies must observe the Federal Insurance Contract Act (VVG/LCA) when drawing up their GCI. This act includes certain provisions which may not be amended by any contractual agreement and others which may not be modified to the detriment of the policyholder or the rightful claimants. The GCI reflect the legal requirements very closely and need to be approved by the supervisory authority, namely the Federal Office of Private Insurance (FOPI). This very strict supervision provides a reliable guarantee of an insured person's interests. Given that the GCI form an integral part of an insurance contract, policyholders must be provided with a copy of them in advance or, at the latest, before submitting his/her insurance application form. More often than not these operations are carried out separately. This is why insurance companies request that policyholders confirm having received and accepted the GCI on their application form.
The golden rule applies when, over a fairly lengthy period of time, salary increases expressed as a percentage are equal to the technical interest rate. According to the BVG/LPP, pension plans attain their objective when the golden rule applies.
In group insurance, a company has a contract with an insurer to protect its entire personnel against specific risks.
Group life insurance
Insurance policy covering individuals in a homogeneous group (such as employees of the same company) as part of a pension plan. Group insurance may be used to provide complete BVG/LPP cover.
A guarantee fund is a fund based on public law. Its function is to pay subsidies to occupational pension plans where the age structure is disadvantageous. In addition, it guarantees the legal benefits due if a pension plan becomes insolvent. Guarantee funds are financed by the pension plans. The share of each institution is determined by the sum of the coordinated salaries of all the insured persons paying their contributions towards an old-age pension.