Insurers without an overseas life assurance business fund will no longer be able to issue term contr...
Insurers without an overseas life assurance business fund will no longer be able to issue term contracts to customers not resident in the UK after a change in Inland Revenue legislation.
The degree to which insurers will be affected by the move will be dependent on where the funds are invested.
For example, all of Allied Dunbar's life assurance, term critical illness and income protection insurance will no longer be available to non-UK residents. However, the change will only affect Zurich Life's term range.
Zurich's critical illness and income protection plans will be exempt because the premiums are invested in a disability rather than a life fund. Whole of life policies will not be affected by the new regulation because they do not have a fixed term.
Scottish Provident will no longer be able to offer its Self Assurance product to non-UK residents because all of its elements are based around a term contract.
Roger Edwards, marketing manager at Scottish Provident, said that while the move will only affect a small proportion of its business the group is still considering setting up the required overseas fund.
He said: "We do not do a great deal of business in this area but any business that is cut off is not good for us, so we will be looking to get back into the market. But we do need to weigh up the issues and investigate the cost before making a decision."
The move will affect residents of the Channel Islands and the Isle of Man, as well as members of the armed forces and Crown employees working overseas.
The ABI expressed concern at the start date for change and following negotiations with the Inland Revenue an extension has been agreed. The new regulations will now come into effect at the end of the year.
