The insurance sector has changed compared to three or five years ago, but some supervisors have not been aware of it, since not only the client is different, but also the technology and the needs are different, so it is necessary that the countries of the region are more agile and flexible.
This reflection was made in Madrid, Spain, by the president of the insurance and risk management multinational MAPFRE, Antonio Huertas, referring to development situations that are not yet understood in some of the countries where they maintain excellent relations in their operations, such as the Dominican Republic, where a 16% insurance rate is still applied, which does not exist in other markets.
They need to understand that Mapfre International can help solve people’s problems individually, he said.
“We are willing to collaborate, to help, and we do,” said Huertas, explaining that in some countries they are not letting them resolve difficulties.
While the CEO of LATAM, Jesús Martínez Castellanos, stated that in the DR there is a situation and that is that savings insurance is taxed in addition to the value of the vehicle, with products linked to retirement and that it is important in this country.
The application of this VAT in this type of branches means that this branch practically does not exist. And no one who has money is going to want to contribute money that has a 16% startup tax. He notes that this penalty does not exist in other countries and they have not convinced the country. Although they are willing to continue helping to improve this.
He specified that the multinational maintains a policy of collaboration and training and a good relationship with supervisors in all the countries where they operate.
Particularly in the Dominican Republic, MAPFRE maintains a good relationship with the regulator and the understanding is good, but it is a law in which, in the case of savings insurance, it is a shame, he said, because a 16% VAT from zero in a product that is not sold that, although it is a collection issue, basically penalizes a necessary development.
In this regard, he said that there is no long-term development in retirement savings and that it is necessary in countries to complement public pensions, but having this regulation prevents that from happening.
The problem is that in other countries it is not. And what is happening? The industry is not developing, he specified.
The ADAS
The Chairman of the MAPFRE Group, Huertas, explained that another issue is that of ADAS (advanced driving assistance systems), which are more than half of the vehicles circulating in large countries such as Europe, the United States and others in the Latin American region such as Mexico and Brazil, which have driving assistance, but have not been able to incorporate it into the car insurance rate because the supervisors do not allow it, despite the fact that this system reduces the accident rate.
“We can charge less by encouraging the purchase of vehicles with intelligent assistance systems to have fewer accidents, but there are still countries where the rate is still a rate on the value of the car, regardless of the type of car that one buys and the level security you have, “he said.
He argued that these are situations that must be overcome, because vehicles are now electric and you cannot have products for electric vehicles, which are connected to the Internet and cannot have specific products for them, which are also quasi-intelligent, which do things alone.
Law 11-92 of the Tax Code of the Dominican Republic established a selective tax of 10% on insurance premiums. Currently, the rate on individual life insurance is 16%. Data
In the Dominican Republic, MAPFRE BHD ranks fourth in Life insurance, maintaining a market share of 10.4%; in damages it is ranked 3rd, with a share of 13.9% and in car insurance it is number 2, with a share of 13.3% in the Dominican insurance market.
It is also present as MAPRE Salud ARS, as leaders in health insurance, since they occupy the number two position in terms of private ARS.
In the Dominican Republic, the insurer offers the best disease risk prevention and management programs. And it has a percentage of 28.15% of “Market share”.
learn more LAW
Article 383, on general insurance services, (reestablished by article 28 of Law 495-06) establishes a 16% tax on 12 general insurance services.
The base of this tax will be the premium paid for all types or modalities of private insurance, including: fire or other insurance against natural disasters, automobile insurance, life insurance, health and accident insurance, marine insurance, liability insurance, and general any other variety of life insurance or property of any nature that are offered in the present or in the future.
In its paragraph I, the law exempts compulsory insurance contemplated in the regime established by Law 87-01, which creates the Dominican Social Security System.
