FBD chief calls for stamp duty reduction to cushion blow of new levy
FBD chief executive Andrew Langford yesterday called on the Government to consider reducing stamp duty from insurance policies to cushion the blow of a new insurance levy being brought in to cover the cost of Quinn Direct's collapse.
The comments on the sidelines of FBD's annual shareholder meeting came the day after Quinn Direct's administrators admitted that the insurer's sale would trigger a claim of up to €600m on the Insurance Compensation Fund.
The fund, which was also initiated after the collapse of PMPA, is paid for through levies on non-life insurers' premium income.
In a note issued yesterday morning, stockbrokers NCB pointed out that the "weakness" in the Irish economy would make it "a challenge" for FBD to pass the levy on the customers.
"Traditionally, insurance companies have always passed the levy on to customers," Mr Langford said yesterday.
"The previous levy recently became additional stamp duty -- we're hoping the Government will consider removing that.
"Given the financial hardship customers are under, to have that stamp duty and a levy together would be a bit harsh."
Stamp duty on non-life insurance policies rose from 2pc to 3pc in June 2009, with the new insurance levy likely to be another 2pc when it's introduced later this year.
The Department of Finance yesterday declined to comment on the prospect of reducing stamp duty.
Earlier, FBD had told shareholders that it was maintaining its full-year earnings guidance of earnings of 130 to 140 cent per share, up on last year's 106 cent a share, despite a predicted further decline in demand in 2011. The outlook was well received by the 100-plus shareholders gathered, but the salaries received by FBD's bosses were condemned by some.
Mr Langford's total remuneration for 2010 came in at €594,000, down about 10pc on 2009's package. Sales and market director Adrian Taheny made €458,000, while finance boss Cathal O'Caoimh bagged €385,000.
The sums were slammed as "immoral" by one shareholder, but FBD chairman Michael Berkery said the remuneration had to be viewed in terms of the plc's performance against an economic "tsunami".
All executive and non-executive directors put before the meeting were re-elected by strong majorities and remuneration policies were approved.