Insurers eye passage of bill abolishing 5.25% annual life insurance tax premium this month

 Life insurers are hoping that Congress? Bicameral Committee will approve this month the proposal to cut 5.25 percent tax off life insurance premiums annually.

Philippine Life Insurance Association Inc. (PLIA) President Victor Quisumbing, in a briefing Monday, said tax issues are among the factors why life insurance is not attractive in the country.

?Policy holders take the brunt of these taxes,? he said.

Quisumbing said a version of the bill, authored by Rep. Liwayway Vinzons-Chato, that abolishes the five percent premium tax and 0.25 percent documentary stamp tax (DST) for life insurance has been passed in the House of Representative.

He said a similar version has been filed in the Senate by Senator Edgardo Angara.

He said they are open even for just a cut in the current tax rate for life insurance ?hoping that this would adjust it to a level that is acceptable.?

?If the tax would be cut we expect a 20-30 percent improvement in our business in 2010,? he said.

Sales of life insurance products in the country registered ?good results? in the first half this year, Quisumbing said but declined to give numbers.

Relatively, PLIA Director Gregorio Mercado said more people will be encouraged to buy life insurance products if the rates will not leave a big dent in their budget.

?We will realize more policy holders if these measures will be approved,? he added.

Life insurers are one in saying that the idea of taking life insurance products is not yet fully grasped by Filipinos due primarily to disposable income issues and lack of knowledge on this.

Quisumbing said the country registers lower individual policy holders against its other countries in Southeast Asia because Filipinos consider buying life insurance not necessary.

He stressed that reforms of the existing law on tax for insurance products will be a big help in their bid to increase the number of life insurance policy holders in the country.

?We?d like to be positive. God willing this (passage of the bills) would be this year,? he added.