This is a new social niche in which the government is addressing: the tax exemptions enjoyed by certain social contracts of life insurance. The Executive will introduce a measure to eliminate this benefit in the bill financing of Social Security, which will be presented Thursday. It expects a revenue of some EUR 270 million. The measure applies to contracts expressed in units of account, or multichannel, products whose capital is not guaranteed. Monosupports contracts in euros, for which samples have already been carried out annually over the water, are not affected.
Currently, contracts in units of account are subject to payroll taxes of 12.1% for the outcome, but not in case of death of the insured. The idea of government is to end that exception.
Contracts of life insurance are extremely popular - households invest more than 50 billion euros every year since 1997, with peaks at over 100 billion in 2006 and 2008. Monosupports contracts in euros - which are not affected by this new measure - are by far the majority, they represent nearly 85% of new contracts signed in 2008 by the French Federation of Insurance Companies. On contracts in units of account, deaths represent 20% of endings.
Towards lively debates
The new measure will affect only a small part so the contracts, which explains why its performance is moderate (in terms of investments in life insurance), but nevertheless represent a significant additional revenue for Social Security, whose deficit will approach 30 billion euros next year. It should generate lively debate in Parliament. "Every time we take a measure like this, it does not measure the impact it will have on the behavior of investors, critic Yves Censi, Vice-President of the Finance Committee of the Assembly. The reports on other products are never anticipated, as they generally tend to neutralize the expected return. "
Several other social niches are in the viewfinder of the government. The draft law on financing of social security include the doubling of payroll taxes that weigh on pensions hats, and the first euro payment to the CSG on securities gains.
Currently, contracts in units of account are subject to payroll taxes of 12.1% for the outcome, but not in case of death of the insured. The idea of government is to end that exception.
Contracts of life insurance are extremely popular - households invest more than 50 billion euros every year since 1997, with peaks at over 100 billion in 2006 and 2008. Monosupports contracts in euros - which are not affected by this new measure - are by far the majority, they represent nearly 85% of new contracts signed in 2008 by the French Federation of Insurance Companies. On contracts in units of account, deaths represent 20% of endings.
Towards lively debates
The new measure will affect only a small part so the contracts, which explains why its performance is moderate (in terms of investments in life insurance), but nevertheless represent a significant additional revenue for Social Security, whose deficit will approach 30 billion euros next year. It should generate lively debate in Parliament. "Every time we take a measure like this, it does not measure the impact it will have on the behavior of investors, critic Yves Censi, Vice-President of the Finance Committee of the Assembly. The reports on other products are never anticipated, as they generally tend to neutralize the expected return. "
Several other social niches are in the viewfinder of the government. The draft law on financing of social security include the doubling of payroll taxes that weigh on pensions hats, and the first euro payment to the CSG on securities gains.
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