Govt Adopts Changes to Insurance Act
The government has adopted changes to the insurance act which include the provisions of two EU directives published since the act was last amended in 2004.
According to Finance Minister Andrej Bajuk, who spoke after the government's weekly session on Thursday, the most significant change is the abolishment of risk equalisation allowances.
The cabinet's proposal would bind insurers only to form equalisation allowances for loan insurance, while having to abolish such provisions for 23 other types of insurance by January 2007.
By implementing international accounting standards, such provisions, which are nothing but untaxed and undistributed profit, according to Bajuk, are no longer needed.
Moreover, as they were untaxed, the ministry will levy a tax on them. Bajuk estimates that the budget would get an additional SIT 2.1bn (EUR 8.76m) in the three years.
The changes also allow insurers to act as brokers in purchasing and selling investment coupons of mutual funds and perform limited reinsurance activities.
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