Comprehensive motor policy losing market due to 21% VAT on non-life insurance

Trade associations’ function

According to a different industry participant, trade associations were aware of the tax’s implementation before the regulator was, and as a result, they actively lobbied the different transport unions to oppose it.

“The industry has been interacting with the government to have the policy removed since its announcement because of the detrimental impact it would have on the industry,” stated another industry participant.

He said, “It should have gone into effect on January 1st, but because of the ongoing engagements, it is on hold, and we don’t know when it will be reinstated or eliminated completely.”

He also emphasized that certain members of the insurance public began to fear the mere announcement of the policy’s implementation, and as a result, they began to move to third-party plans.

He stated that in order to determine the entire impact of the VAT on non-life insurance, if it were not completely withdrawn, the various stakeholders in the sector were still gathering data.

new minimum amount of capital

The insurance sector has been going through some challenges in the last couple of years, with some local insurance companies still yet to meet the new minimum capital requirement set by the National Insurance Commission, whose deadline expired on December 31, 2021. In June 2019, the NIC announced a new capital requirement for insurance companies operating in the country after a series of consultations and discussions between industry players and the regulator.