Insurance premiums to stay put for now despite pandemic levy

Property and motor vehicle owners in Barbados are being assured they will not have to pay higher premiums anytime soon as a result of the 15 per cent Pandemic Contribution Levy imposed on insurance companies.

President of the General Insurance Association of Barbados (GIAB) Randy Graham said the industry will do all it can to absorb the costs.

He was responding to Prime Minister Mia Mottley’s Financial Statement and Budgetary Proposals delivered in the House of Assembly, in which she announced that companies that fared better during the height of the COVID-19 pandemic, including those in telecommunications, retail sale of petroleum products, commercial banking and general and life insurance, will have to pay the levy from July.

The one-off levy will apply to businesses with a net income above $5 million in 2020 and 2021.

The GIAB president said while the insurance sector is already heavily taxed, it was still willing to play its part in helping the economy recover.

“A lot of people are talking about the taxes and additional taxes on the system, and they are right. The insurance sector is also heavily taxed and we have to pay taxes as they become due.

“We will have to contribute towards the levy and we will do our part as best as we can to consume the additional levy so as not to pass on to the consumer in the form of increased premiums. We have consumed the other taxes and [did] not increase premiums to the policyholders and we will try our best to make sure the companies can do that [again],” Graham told Barbados TODAY.

However, he said, insurance industry leaders wanted to be “part of the consultative process on taxes”.

“At some point, you would like to get some consultation with the Government going forward when these things occur,” he said.

Even so, Graham appeared to empathise with the Government which Prime Minister Mottley said has spent $1 billion on the COVID-19 fight.

“To be fair, no one expected the pandemic to go this long. The country has had to incur expenses of testing, hospitalisation, all sorts of additional expenses that have gone into the millions, and we have to find some way as a country to try to cover those expenses and get Barbados back to some level of normalcy; and if we have to contribute to the levy, we will do so,” he declared.
emmanueljoseph@barabdostoday.bb