Consumers with questions should contact their insurance representative
ST JOHN'S, April 29, 2016 /CNW/ - In an effort to reduce the provincial deficit, the Government of Newfoundland and Labrador announced the reintroduction of a retail sales tax (RST) on insurance premiums in its recent 2016 budget. Today in a memo issued to insurers, the government confirmed that the sales tax will be applied only to property and casualty (P&C) insurance policies issued or renewed on or after July 1, 2016. Insurance Bureau of Canada (IBC) is reminding consumers in Newfoundland and Labrador that if they have questions about their policy, they should contact their insurance representative.
"While no one is ever happy about a new tax, the information received today provides clarity for the insurance industry in order to prepare for the questions that customers are going to have," said Amanda Dean, Vice-President, Atlantic, IBC. "Insurers will now work to ensure that the invoices for renewals that take effect on or after July 1 include the RST."
For those customers who have already received invoices for policies renewed on or after July 1, insurers will issue correspondence shortly with details on compliance with the RST collection guidelines.
If consumers have any questions about their home, car or business insurance policy, IBC advises that they get in touch with their insurance representative or call IBC's Consumer Information Centre at 1-844-2ask-IBC.
Insurers, brokers and agents may need a few days to ensure that all staff are knowledgeable on the new guidelines, but they will be working to provide accurate information to clients as quickly as possible given the information received today. Insurers typically issue renewal documentation 60 days prior to the policy renewal date. The government worked to get this clarification to the insurance industry quickly in order to ensure that consumers still had ample time to review coverage and other details contained in their policies.
IBC advocated strongly on behalf of insurers and consumers in Newfoundland and Labrador to ensure that this tax would not be applied to policies already in force. More information released today about the RST includes:
- The RST will be set at 15%; this is the same rate as the province's HST on applicable goods and services, which was increased from 13% in the 2016 budget;
- The sales tax will apply to policy-effective dates beginning July 1, 2016, and also to policies that are cancelled prematurely and then renewed in an attempt to avoid RST;
- RST will be remitted on a basis that coincides with the timing of premium instalments; and
- Policies of accident and sickness, life insurance, marine, surety, and guarantee or fidelity type bonds are exempt from RST.
About Insurance Bureau of Canada
Insurance Bureau of Canada (IBC) is the national industry association representing Canada's private home, auto and business insurers. Its member companies make up 90% of the property and casualty (P&C) insurance market in Canada. For more than 50 years, IBC has worked with governments across the country to help make affordable home, auto and business insurance available for all Canadians. IBC supports the vision of consumers and governments trusting, valuing and supporting the private P&C insurance industry. It champions key issues and helps educate consumers on how best to protect their homes, cars, businesses and properties.
P&C insurance touches the lives of nearly every Canadian and plays a critical role in keeping businesses safe and the Canadian economy strong. It employs more than 120,000 Canadians, pays $8.2 billion in taxes and has a total premium base of $49 billion.
For media releases and more information, visit IBC's Media Centre at www.ibc.ca. Follow IBC on Twitter @InsuranceBureau and @IBC_Atlantic or like us on Facebook. If you have a question about home, auto or business insurance, contact IBC's Consumer Information Centre at 1-844-2ask-IBC.
If you require more information, IBC spokespeople are available to discuss the details in this media release.
SOURCE Insurance Bureau of Canada
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