Insurance association urges less dependency on social welfare

A pre-budget document issued by the Malta Insurance Association and presented to the government makes four major proposals aimed at encouraging people to save and reduce their dependency on social welfare.

The proposals, the association said, are also designed to encourage individuals to supplement their social security medical entitlement with a private scheme.

Furthermore, they call for the removal discriminatory taxes which punish local insurance providers and urge change in the employment law in order to temper the potential for breach of trust.

The first proposal urges the government to take tangible measures to encourage higher private lifetime savings which will reduce dependency on social welfare, even on a long-term scale.

Such measures should include the removal of document duty and a number of policies should be excluded from tax provisions to do away with any deterrents for voluntary provision.

Another proposal focuses on private healthcare stating that only eight per cent of the population enjoys an extensive refund plan.

Among the salient points of this proposal, the association is claiming that better cost controls and monitoring of service providers would be a good step in encouraging private healthcare insurance.

Similarly, the establishing of minimum standards for record keeping and communication of medical data, which until this day remain inexistent, would significantly facilitate procedures.

The proposal about tax disincentives on insurance outlines current tax anomalies which lead to a competitive bias in favour of companies not established in the island.

The government should also see through its policy stated in the Budget two years ago when it undertook to remove the minimum charge to document duty which, until now, was punishing individual policy holders and encouraging them to purchase their insurance protection overseas.

Finally, the association is arguing in favour of revisions to the employment law with the aim of introducing what in the UK is known as "gardening leave".

This would reduce the potential for breach of trust when an employee gives notice of termination.