Insurers fear high additional burdens from tax reform

Jogger while exercising

Sports disability insurance is a thorn in the side of the Federal Ministry of Finance.


(Photo: dpa)

Frankfurt It is seldom that consumer advocates and insurers are so in agreement: But the planned law to modernize insurance tax law has received sharp criticism from both sides.

In addition to the high costs of implementation, the General Association of the German Insurance Industry (GDV) complains that the new rules are too abstract and complicated: “From our point of view, the planned reform is a bureaucratic monster and thus a good example of how reducing bureaucracy does not work”, said Volker Landwehr, head of the tax department at GDV, the Handelsblatt.

The GDV expects that the implementation could cost insurance companies more than 130 million euros next year. However, there would be no significant additional tax revenue for the state.

Even the Association of Insured (BdV), which represents the interests of insurance customers, considers the planned new regulations to be “absurd” and “expensive”, as CEO Axel Kleinlein emphasized to the Handelsblatt: “Due to the extensive obligations that arise for the insurer, In the end, consumers are also burdened more. “

Consumer advocates and insurers want to draw attention to the issue in the run-up to a hearing in the Bundestag’s finance committee on Monday – in the hope of still being able to make changes to the law.

Background: Insurance companies normally have to pay 19 percent insurance tax on all property and casualty insurance fees. For social reasons, however, contributions to health, long-term care and life insurance, including occupational and disability insurance, have so far been tax-exempt. The point here is that the policyholders are privately insured in the event of illness or occupational disability and are therefore not on the wallet of the community.

However, the Federal Ministry of Finance (BMF) sees a problem when the benefits from these insurance policies do not go to the insured person or their close relatives. A particular thorn in the side of the BMF is the so-called player failure insurance. Here, for example, a football club receives the money if a player becomes unable to work. Film failure insurance or key worker insurance are constructed in a similar manner, in which a company receives benefits if a central person is absent.

These products are to be subject to insurance tax liability in the future. There are additional tax revenues of around six million euros per year. The BMF wants to “specify the content of the regulations and in this way ensure more legal certainty”, it says on the website of the ministry.

Name products specifically

But instead of naming exactly the affected products in the planned law, the new regulations are formulated too vaguely from the point of view of BdV and GDV – which makes implementation complicated and expensive for the industry.

In principle, contributions on private life and pension insurance should remain exempt from insurance tax in the future. In the case of health, long-term care, occupational disability and disability insurance, however, insurance tax is to arise if the insured person or a close relative does not receive the benefit in the insured event. The new regulation is to be introduced for contracts concluded from July 1, 2021.

The insurers would then have to regularly check with occupational disability insurance and Co. who the reference person is and whether this triggers an insurance tax liability or not. An example: If the insured event goes to the friend of the insured person, the contributions would be subject to insurance tax under the new rules. If the girlfriend becomes a fiancé and thus a close relative, the insurance tax liability would no longer apply.

Combination products, for example from life insurance including disability protection, are also complicated. Many insurers only show a total premium. The question is how insurance tax should be calculated in such cases if only the disability component is subject to insurance tax during the term of the contract.

Surveys by the GDV among insurance companies have shown that they will no longer be able to offer certain long-term care insurances, for which the beneficiary is, for example, a care facility – the implementation of the new rules would simply be too time-consuming for them.

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