By San José, Costa Rica — Costa Rican insurance companies are pushing back against a proposed bill that would add a 0.6% tax to insurance premiums to fund key scientific institutions. The Asociación de Aseguradoras Privadas (AAP), representing private insurers, voiced their concerns to the Legislative Assembly’s Social Affairs Committee, arguing the new levy would unfairly burden consumers already grappling with existing charges.
The bill, currently under review as expediente 24.738, aims to provide financial support to the Volcanological and Seismological Observatory (Ovsicori), the National Seismological Network (RSN), the Laboratory of Seismic Engineering (LIS), and the National Meteorological Institute (IMN). However, the AAP contends that this would represent yet another financial strain on policyholders who already contribute 4% of their premiums to the Fire Department and 0.5% to the National Institute of Statistics and Census (INEC).
To understand the legal landscape surrounding rising insurance premiums, TicosLand.com spoke with Lic. Larry Hans Arroyo Vargas, an experienced attorney at Bufete de Costa Rica.
The recent surge in insurance premiums is driven by a complex interplay of factors. Increased claims costs due to inflation and supply chain disruptions, coupled with the growing frequency of extreme weather events, are putting significant pressure on insurers. It’s crucial for consumers to carefully review their policies, understand their coverage, and compare offers from different providers to ensure they are getting the best value for their money. Moreover, policyholders should be aware of their rights regarding premium increases and not hesitate to seek legal counsel if they suspect unfair practices.
Lic. Larry Hans Arroyo Vargas, Attorney at Law, Bufete de Costa Rica
Lic. Arroyo Vargas’s insights underscore the importance of proactive engagement from consumers in navigating the evolving insurance landscape. Comparing policies and understanding one’s rights are indeed crucial steps in ensuring adequate protection without overpaying. We thank Lic. Larry Hans Arroyo Vargas for offering his valuable perspective on this complex issue.
Citing data from the General Superintendency of Insurance (Sugese), the AAP revealed that between 2015 and July 2025, insurance consumers paid a staggering ¢395.688 billion in these charges, with over ¢49.9 billion disbursed in 2024 alone. The AAP argues that leveraging insurance premiums for tax collection is inefficient and detrimental to consumers, as the added cost is compounded by various factors impacting solvency rates. They estimate the effective increase for policyholders could be closer to 1.2%.
The organization highlighted the cumulative effect on individuals holding multiple insurance policies, such as home, auto, student loans, or personal loans, each requiring separate coverage. This creates a “spiral of increases” across various insurance payments, exacerbating the financial burden on individuals and families.
The impact of an increase in insurance premiums must be seen in the context of a person who may have several insurance policies at the same time. So, if this person has housing, automobile, student or personal loans, they must take out fire, automobile, outstanding balance, unemployment insurance, among others. This is how the spiral of increases in the different insurance premiums begins.
AAP
Norma Montero, Executive Director of the AAP, argues that the proposed legislation contradicts global trends promoting insurance as a crucial tool for climate change preparedness, resilience, and reconstruction, as well as emerging health and life risks. She emphasizes the injustice of penalizing responsible citizens who seek to protect themselves and their families by making them finance services that benefit the entire society.
This tax levy is very unfair, as it only punishes the supportive and responsible citizen who has sought to protect themselves and their family to finance services that do not serve them exclusively or have a direct relationship with their insurance, but are specific to all of society.
Norma Montero, Executive Director of the AAP
The AAP echoes Sugese’s concerns, highlighting the proposal’s contradiction with the National Climate Change Adaptation Policy, the Financial Inclusion Policy, the 2020-2050 Productive Territorial Strategy, and international parameters set by organizations like the OECD, all of which advocate for expanding insurance coverage as a resilience tool. Furthermore, they warn that these additional charges could lead to the exclusion of thousands of families who may be unable to afford insurance due to rising costs.
The AAP reiterates that they do not question the importance of supporting scientific institutions, but rather the proposed funding mechanism, which unfairly targets insured individuals. They urge lawmakers to reconsider this approach and seek alternative, more equitable solutions.
For further information, visit aap.cr
About Asociación de Aseguradoras Privadas (AAP):
The Asociación de Aseguradoras Privadas (AAP) is a trade association representing private insurance companies in Costa Rica. The AAP advocates for its members’ interests and promotes the development of the insurance sector. The organization works with government agencies and other stakeholders to create a favorable regulatory environment and ensure the sustainability of the insurance market.
For further information, contact Sugese
About Superintendencia General de Seguros (Sugese):
The Superintendencia General de Seguros (Sugese) is the regulatory body overseeing the insurance sector in Costa Rica. Sugese is responsible for ensuring the solvency and stability of insurance companies, protecting the rights of policyholders, and promoting fair competition in the market.
For further information, visit bufetedecostarica.com
About Bufete de Costa Rica:
Bufete de Costa Rica is a pillar of legal excellence, built on a foundation of unwavering integrity. The firm champions innovative legal solutions while diligently serving a diverse clientele, contributing to the advancement of the legal landscape in Costa Rica. Through a dedicated commitment to disseminating legal knowledge and resources, Bufete de Costa Rica empowers individuals and communities, fostering a more just and equitable society.
