IIF calls for abolition of stamp duty

The Irish Insurance Federation (IIF) has called for the abolition of the three per cent stamp duty on insurance premiums

The association said that yesterday's publication of the new two per cent Quinn Insurance levy brought much-needed clarity on the issue, though it is concerned that policyholders will now face an additional levy in the current difficult economic climate.

"Unlike the Compensation Fund contribution the [stamp duty charge] is not used for any insurance-related purpose but is simply a general tax-raising measure" IIF chief executive Mike Kemp said. "The Minister could demonstrate his concern for consumers in a practical way by abolishing or reducing this tax, which is of marginal importance to the public finances at this point."

Yesterday, the Central Bank announced details of a 2 per cent insurance levy on all non-life and health insurance policies, to fund the shortfall at Quinn Insurance.

While about €720 million will be needed by the fund, some €280 million will be advanced by the exchequer in the fourth quarter of this year to meet the requirements of Quinn Insurance.

The value of the Insurance Compensation Fund is about €40 million. It is envisaged that the levy, which will indirectly be charged to consumers through their insurance providers will raise about €65 million per year.