Romain: Insurance premiums to increase over levy

Malabar/Mausica MP Dominic Romain during the budget debate on October 17. - Parliament

Malabar/Mausica MP Dominic Romain has warned that insurance agencies are already planning to raise premium prices in response to the government's intention to implement a 0.25 per cent levy against its assets.

Contributing to the budget debate in Parliament on October 17, Romain, who is also the president of the TT Association of Insurance and Financial Advisors, said he met with the heads of leading insurance companies where the levy was discussed.

"I can tell you, based on what was said, the preliminary numbers have been crunched, the conversation is being had and increases are coming. It's just a matter of how much and when. So the policy fees will be going up."

Referencing calls from the Minister of Finance, Davendranath Tancoo, for companies to share the burden of these measures and citizens to push back against the cost being passed on to them, Romain said the heads are not prepared to do that.

"Because at the end of the day, these companies have an obligation to their shareholders. Their shareholders are not just those who purchase their shares, but to their customers and clients, as well, who have participating policies that depend on these companies making profits to build their cash value. So when the government intends to pick the pockets of these entities...you are in fact robbing the citizens as well."

Tancoo announced the levy against insurance companies and commercial banks during his budget presentation on October 13.

"Commercial banks and insurance companies, due to their large size, profitability and capitalisation, have reported sustained earnings, high liquidity ratios and strong asset base growth. Conservative lending practices and favourable monetary conditions have driven these outcomes. Despite this, the average citizen continues to be subjected to unreasonably high fees and near-zero returns on their savings and investments."

Institutions operating under the provisions of the Special Economic Zones Act will be exempt from this levy. It goes into effect on January 1, 2026, and is expected to contribute $575 million to revenues annually.

Romain said institutions, like Republic Bank, are in the National Investment Fund and applying the levy on them would negatively impact the shareholders.

"So these persons who would have invested their money, some of them senior citizens who would have been looking to get additional income to support their retirement expenses...now find themselves in this situation."

He slammed the Minister of Finance for attempting to paint a picture that the financial institutions were predatory and harsh. However, he said many of the institutions engage in corporate social responsibility and give back to the community.