The non-life insurance industry has expressed concern over some of the issued as proposed in the revised direct taxes code (DTC).
A delegation of General Insurance Council (GIC) will be meeting the Central Board of Direct Taxes (CBDT) officials on June 23 to make its representation over the issue.
Talking to reporters on the sidelines of the Skoch summit in Mumbai on Thursday, M Ramadoss, chairman and managing director of New India Assurance, said that the revised DTC has suggested that profit made on investments will be taxable now and is a matter of concern for the company.
??It is all set to have its impact our profit after tax (PAT). Hence we will express our concern through GIC before CBDT during our meeting with them.??
However, the move to tax investment profit will not affect NIA for next 2-3 years as the company has got accumulated underwriting losses and it would take 2-3 years for the company to get over such accumulated loss..
Also, we are demanding that certain kind of non-life insurance products like premium income from health insurance and home insurance should be kept out of the service tax net. However, we are yet to hear from the government on the topic, said Ramadoss.
In the case of United India Insurance, out of total investment of Rs 15,000 crore made by the company in 2009-10, Rs 900 crore was the profit booked in the year.
On portability of health insurance premium, Ramadoss said that the GIC had already designed the product and now it was waiting for approval from our regulator, Insurance Regulatory & Development Authority (Irda) before rolling out.
Commenting on the possible increase of premium in the third party motor premium, he said that the general insurers would be writing to Irda soon on the subject.
??We have already held several rounds of talks with commercial transporters’ associations on the issue. We want that the premium on third party motor premium must be increased by 50% from the existing rates. Though it is also true that transporters have not agreed to our point of view on the issue thus far and they want discount,?? said Ramadoss.
However, the general insurers feel that the third party motor insurance business was not a viable business with the existing rates and hence expected Irda to intervene into the matter, said G Sreenivasan, chairman and managing director of United India Insurance.