Insurance has been a huge topic of discussion over the past few months with emergency COVID-19 laws, budgets and guidelines established globally. Whilst the focus of this initial legislation was based around payment deferrals, suspending penalties and ensuring continued cover for the consumer, government attention is now turning to insurance companies and how they may be able to assist with the next phase of dealing with the impact of the global pandemic.
Indirect taxation on insurance premiums is in action globally to generate and pool revenue for certain risks. Often, these are risks that cannot be taken on by an insurer, such as acts of terrorism, and are government-led with the aim to provide compensation for those affected. We have seen in the past that when an event occurs and further funding is required, legislative amendments can be made to increase these contributions.
In a similar way, President Macron has proposed to establish a temporary compensation fund for the entertainment industry in France, to cover work which is postponed or cancelled due to pandemic guidelines. Whilst the fund has not officially been established yet, it is reported that it will be run by the Centre national du cinéma et de l’image animée (CNC) and be part-funded by insurers.
It is likely that we will see similar announcements emerging from governments globally, as they plan to establish levies and funding from insurers and premiums to assist various industries in sustaining and rebuilding.
Speaking to journalists after Macron’s address, culture minister Franck Riester said that the government would be calling on insurance companies to help co-finance the fund.