INSURANCE INDUSTRY representatives will meet the Department of Finance this morning in a last-ditch effort to persuade the Government to amend its plan to impose a levy on the sale of life and pension policies.
Industry executives say the decision taken in the emergency Budget to impose a levy on life policies was based on inaccurate information and will fundamentally distort competition in the sector.
The Finance Bill is scheduled to begin its committee stage in the Oireachtas tomorrow and the Government has said it does not intend to take any further amendments once it has passed through committee and on to the report stage.
Mike Kemp, chief executive of the Irish Insurance Federation, said the Government based its expected €140 million yield from the levy on the basis of industry figures for 2007. However, sales fell significantly last year and are down a further 40 per cent across the sector so far in 2009.
Some sectors have fared far worse, with single premium product sales down by up to 80 per cent for some providers. Mr Kemp argues that introducing the levy will only further undermine sales.
He adds that, while insurers recognise that some sort of levy is inevitable, the form proposed is fundamentally inequitable.
“I do not think it should apply to pensions,” he says. “The Government should be encouraging people to invest in this area, not dissuading them.”
Standard Life spokeswoman Aileen Power said pension savers were already under pressure after the poor performance of funds over the past 12 months while the upcoming report from the Commission on Taxation was likely to suggest further reform of the sector.
