HDFC Life, SBI Life, Go Digit: Here is why insurance stocks are gaining today

HDFC Life Insurance gained 1.56%, SBI Life Insurance rose 1.53%, Go Digit General Insurance advanced 1.42% while The New India Assurance climbed 1.09% Shares of insurance companies were trading higher on Wednesday, September 10, amid reports of top executives meeting Department of Financial Services (DFS) officials to discuss the recent changes in Goods and Services Tax (GST) regulations. CNBC-TV18 reported that ahead of the meeting, insurers sent a letter on September 9 to the Finance Ministry and the Central Board of Indirect Taxes and Customs (CBIC), highlighting their concerns over the recent GST changes. People familiar with the matter told the news portal that the Life Insurance Council is expected to meet the chairman of the Insurance Regulatory and Development Authority of India (IRDAI) soon, seeking support before taking the issue to the government. Also read: How much you may save on life and health insurance premiums now that GST is gone The meeting comes after the GST Council on September 3 decided to exempt all individual insurance premiums from tax. The revised rates will take effect from September 22, the first day of Navratri, Finance Minister Nirmala Sitharaman announced after the 56th Council meeting. The finance minister had said that all individual life insurance policies, whether term life, unit-linked insurance plan (ULIP) or endowment policies, and subsequent reinsurance are exempt from GST. All individual health insurance policies, including family floater policies and policies for senior citizens and reinsurance thereof, will also be exempt from GST. Since its inception in July 2017, GST at the rate of 18% has been levied on premiums paid towards health insurance and life insurance. According to the news report, the insurers’ key demands are to make the recent GST changes prospective, allow input tax credit (ITC) on renewal premiums, and exempt commission expenses from GST, arguing that ITC on reinsurance and commissions was already included in policy pricing. Currently, reinsurance is exempt, but commissions are still taxable. Following these developments, shares of insurance firms witnessed increased demand. HDFC Life Insurance gained 1.56%, SBI Life Insurance rose 1.53%, Go Digit General Insurance advanced 1.42%, The New India Assurance climbed 1.09%, ICICI Prudential Life added 1.07%, Max Financial Services increased 0.25%, and LIC edged up 0.19%. Meanwhile, Niva Bupa Health Insurance traded 0.24% lower. Also read: Avanti Feeds, Apex Frozen Foods shares surge up to 20% after EU lists 102 new fishery establishments In the financial year 2023-24 (FY24), the government has collected ₹16,398 crore from GST levied on healthcare and life insurance. To add Upstox News as your preferred source on Google, click here.