Monday, January 30, 2023

No selective tax on life insurance

Following the line of the previous article, I must say that we must do our part to correct and improve the environment of our actions in the insurance market.

We have many good professionals who could influence socio-political life to drive actions that would greatly improve market outcomes. But they will not fall from the sky, some muscle we have to move. Our wisdom is of no use to us, if it is not to manage responsibly.

We have always claimed that life insurance should not be taxed, and less selective, as if it were a luxury item. What currently enters the State for it is very little in relation to the benefits that the country would obtain by removing such an onerous obligation. In fact, insurance does not deserve to have an excise tax. It is a necessity and a priority for the private property system in which we live. It is a priority for large companies, which need to have it to continue providing jobs and consumer goods and services at the time of a particular catastrophe or loss such as fire or others.

Premiums for this year will not exceed 1% of total premiums. In 2021 they were just RD$348. However, the amount of premium that is exported in US$ to countries that do not apply taxes to life insurance is higher, money that could be as reserves, in investments in the country. We are the country that invests the least, after Cuba, in protecting the future of children, or in savings, which are the fundamental functions of life insurance. Isn’t it difficult to understand?

I understand that we have not done enough due diligence to get lawmakers to understand the situation. As has happened to us with the DGII, which still does not require vehicle insurance to issue the circulation permit. Being worse, since Law 63-17 requires it in its Art. 161, along with the vehicle technical review. I understand that we don’t have to do a civic uprising to achieve this. We just have to be persistent and intelligent to know how to act, when and with whom. But act, because waiting with your arms crossed, nothing comes.

The benefits for the country of increasing life insurance, eliminating the excise tax are enough reasons to do so: We would increase the volume of mathematical reserves, which must be invested in the country’s financial instruments.

The benefits of these investments would generate taxes in greater volume than the current ones. We would have taxes for ceded reinsurance. Taxes on commissions from brokers and agents. And it would encourage to increase the number of insurance agents and their income. Not to mention offering a better instrument to ensure the future of the minor children of those parents who may have an accident or die from other causes covered by life insurance.

We hope that the commission created for the modification of Law 146 will take our suggestions into account. Like the authorities responsible for supervision.

But also that the unions that would benefit from such decisions do not believe that with the passivity that challenges are assumed, they will conquer heaven. Please!

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