- Scheme aims to support loss of livelihoods due to quarantine process related to epidemics including COVID
- Businesses and factories with over 50 employees to contribute 0.25% of turnover to proposed insurance fund
- Liability for select diversified conglomerates to be between Rs. 350 and Rs. 500 m each
Prime Minister and Finance Minister Mahinda Rajapaksa’s proposal of COVID insurance in 2021 Budget yesterday is likely to be a thorn for the private sector though it may be good news for policyholders.
To support those who temporarily lost their livelihoods due to the quarantine process related to epidemics including COVID, Rajapaksa proposed to get businesses and factories with more than 50 employees to contribute 0.25% of the turnover to the proposed insurance fund. It is intended that this insurance scheme is used for the employment at retail and wholesale shops with more than five employees and hotels.
Analysts said 0.25% of turnover means for Hayleys which is the conglomerate with highest turnover last year would incur over Rs. 500 million and premier blue chip JKH liability will be over Rs. 350 million.
Rajapaksa said COVID Insurance Scheme would be implemented with the assistance of the Government in parallel to the Agrahara Insurance Scheme for all public services.
Apart from this, there was positive news for the insurance industry with 2021 Budget including premiums paid up to Rs. 100,000 per month as part of deductible expenditure for personal income tax.