Companies have an obligation to insure their Executives against the risks of death and permanent disability following accidents, as indicated in the National Labor Contract “CCNL “ for Executives.
The amounts insured vary from case to case, and are based on salary multiples as follows :
- 5X gross annual salary in the case of Death;
- 6X gross annual salary in the case of Total and Partial Permanent Disability
With regards to Executives working in Industry, this requirement also regards occupational illness.
The coverage offered for this category of employment differs as we have two different National Labor Contracts : Industry, and Commercial:
- Only the Industrial executives are subject to extending coverage to occupational illness;
- Only the Industrial executives are subject to a lower compensation due to amounts already paid to them by INAIL ( Italian State Workers Compensation Fund ).;
- Only the Industrial executives have the option to have non professional accidents claims paid to the employer so as to deduct the share of the insurance premium paid for this coverage from the basis of taxation.
The PREVIDIR Fund offers coverage as follows:
Amounts insured are based on a salary multiple basis and the amounts of the daily indemnity are at the discretion of the Employer.
In order to define what the employer and employee’s tax implications are , we must address the following aspsects of the beneficiary :
- has the beneficiary been designated by the employer;
- has the beneficiary been designated by the employee.
In the first case, the payment of contributions by the Employer does NOT constitute part of the employee’s income . The contributions paid by the employer may be deducted from the corporate income.
Circular decree 55/E Revenue Agency 04/03/1999
In the second case, the following connotations shall apply :
- Regarding the employee, the contributions paid to the fund will be taxable only for the part regarding the extra professional component of coverage.This will be based on 20 % of the total premium;
- Regarding the employer , the contribution is fully deductible from corporate income from a tax / fiscal point of view. Regarding the contribution charges, only 10 % is subject to the solidarity contribution of the premium paid for the extra professional compionent of the risk ( 20 % of the total premium )
Art. 6 – lett. F D. Legal decree issued. 02/09/1997 n.314
The flexibility of coverage offered by PREVIDIR has features that allow employers to achioeve full compliance between insurance solutions and contractual labor requirements. This includes such advantages as:
- Inclusion of occupational diseases automatically covered when required;
- Changes may be made upon request by implementing the directives indicated in the Circuklar n 55 of the Italian Revenue Agency;
- Salary multiples exceeding the mandatory limits may be guaranteed;
- special conditions offer Eexcutives 100 % disability benefits for accidents or occupational illness which exceed 50 %.