2023-08-01 10:46:23
One of the main concerns of the sector is that many of these reinsurance contracts have already been signed, but due to the existing exchange restrictions, the payments in dollars requested are delayed.
The Argentine Insurance Committee (CAA), an entity that represents the five most important chambers in the sector, issued a statement addressed to the Government authorities warning about the serious consequences generated by the imposition of the Country Tax and its application on the insurance activity.
According to the statement, the measure adopted by the Ministry of Economy, through Decree 377/23, which extends the application of the PAIS Tax to various activities, will have a significant negative impact on the private insurance industry. In particular, the 25% rate will fall on reinsurance contracts and claims payments abroad, which will generate an increase in costs throughout the sector’s production chain.
“This will automatically determine that large-risk insureds are practically obliged to buy their insurance in the State to avoid paying the premium, which private ones must include,” the text stated.
The CAA is made up of the Argentine Association of Insurance Companies (AACS), Insurers of the Interior of the Argentine Republic (ADIRA), the Civil Association of Life and Retirement Insurers of the Argentine Republic (AVIRA), the Union of Risk Insurers of Labor (UART) and the Association of Argentine Insurance Companies (AADEA).
The CAA demanded “that the exemption of the sector from this tax be regulated and that with immediate effect it not be applied to existing contracts retroactively
“We are extremely concerned because the payment of the retroactive PAIS tax on contracts already concluded and with rates not subject to modification, which are unpaid for reasons unrelated to the sector, threatens the solvency of the companies, and can generate job losses. On the other hand, the exemption applicable only to state insurers and reinsurers generates inequality of conditions when it comes to competing, Irene Capusselli, president of Avira, told Infobae.
One of the main concerns is that many of these reinsurance contracts are already signed, but due to existing exchange restrictions, the requested dollar payments are delayed. “This situation will cause a loss that businessmen in the sector estimate at up to $30,000 million in a single day for the insurance industry,” they warned.
AFIP General Resolution No. 5393 establishes that the tax will be paid when the exchange operation is carried out, which in this case will be retroactive and will severely affect the sustainability of the insurance activity, jeopardizing compliance with contractual obligations by private companies. , secure the text.
In addition, the measure also threatens free competition in the sector, since AFIP’s clarifying regulations exempt state insurance operators, both national and provincial, from paying the 25% Country Tax on reinsurance contracts. This tax difference could force large-risk policyholders to purchase their insurance in the State to avoid paying a premium, which would leave private companies at a disadvantage.
The Minister of Economy Sergio Massa
Another point of concern is the possibility that the National State, having a Reinsurer exempt from the tax, centralizes all private reinsurance contracts, generating a setback towards a “nationalization” of the insurance activity and discouraging private development.
Faced with this situation, the CAA demanded “that the exemption of the sector from this tax be regulated and that with immediate effect it not be applied to contracts in force retroactively, which could not be paid for reasons beyond the control of the Insurers. And in turn, that all the players in the insurance industry compete with the same rules and under equal conditions”.
“From the Argentine Insurance Committee, we urge the authorities to correct these measures to avoid their damages that do not help our economy at all. We trust the reasonableness of our request,” the statement closed.
As Infobae published this month, the recent economic measures and the imposition of the Country Tax could have a direct impact on car and motorcycle insurance in Argentina.
Keep reading:
Point by point, the announcements made by Massa Anses pay a $36,000 bonus for retirees next week: who will collect it Argentina was the only Mercosur country in which beef exports grew
#Losses #million #day #risk #nationalization #activity #harsh #warning #insurance #industry