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The life insurance industry is becoming increasingly attractive

Insurers and financiers believe that it is necessary to stimulate the life insurance development in Kazakhstan, reports kursiv.kz.
The life insurance industry is becoming increasingly attractive

As of December 1, 2018, the total amount of insurance premiums amounted to 347.1 billion tenge, the life insurance sector accounted for 110.4 billion tenge of them. The total insurance premiums were 21.7%, and as of December 1, 2017, they were equal to 17.3%.

Insurers have been negotiating with the Tax Committee for 10 years, asking to exclude a double taxation on individual income tax. The state wanted to stimulate the life insurance industry with a non-working tax benefit, according to which a person who had entered into a life insurance contract had the right to take contributions to the insurance company from the tax deductions at year-end. However, at the contract end, the beneficiary had to pay the PIT in the amount of 10%.

“In our practice, clients did not take deductions (only 15% of people used this privilege), for that reason there was double taxation, 75% of policyholders lost money. I am sure you understand that accounting department at a large enterprise would not issue benefits for one employee, and people did not go to the tax department,”- explained the situation Askar Shakenov, the Deputy Chairman of Nomad Life Insurance Company.

Now the benefit rate in insurance coverage obtaining does not work, but this does not help the market development, since the income from the policy is not subject to income tax, only if the insurer, the insured and the beneficiary coincide in one person.

“If a person insures, pays fees and then receives money, there is no tax. But people do not insure only their own lives. A large percentage of contracts issued in favor of the child. Of course, a premature tax policy does not stimulate the market. We propose to reduce the tax deduction in this case. Taxmen fear that there might be disinvestment. We checked the statistics. There were no tax evasion schemes in life insurance in Kazakhstan,” said Vitaly Lyubimov, the Managing Director of Halyk-Life LIC.

“Life insurance companies improve the social security of citizens, their families reducing the state social obligations. Therefore, it is necessary to stimulate the life insurance development in the country,” Financial Institutions’ Association of Kazakhstan believes.

Source: https://kursiv.kz/news/strakhovanie/2019-01/otrasl-strakhovanie-zhizni-stanovitsya-vse-bolee-privlekatelnoy
Photos from open sources  

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