23 December 2014
The French Parliament has approved the IPT rate increase from 9% to 11.6% in respect of Legal Expenses insurance contracts (Class 17).
The rate increase is stated in Article 35 of the 2015 Budget Law that was subject to Parliament’s Final Vote on 18 December 2014. The final text of the Budget Law is expected to be published shortly in the “Journal Officiel”.
What Insurance Contracts are Subject to the IPT Increase?
The IPT rate increase will apply to insurance contracts issued on or after 1 January 2015 in accordance with Article L127-1 of the French Insurance Code. It is, however, understood that certain specific Legal Expenses insurance contracts should fall outside the scope of the increase.
Action Points for Insurers
Some of the areas that insurers need to address in a short time period that included the Christmas break include:
Update underwriting systems and/or similar to ensure full French IPT compliance with effect from 1 January 2015
Consider manual overrides until IT systems are updated
Determine which type of Legal Expenses insurance contracts are subject to the increase and which are not