Statutory Instruments
1997 No. 265

INCOME TAX
The Life Assurance and Other Policies (Keeping of Information and Duties of Insurers) Regulations 1997

Made
10th February 1997

Laid before the House of Commons
10th February 1997

Coming into force
1st April 1997

The Commissioners of Inland Revenue, in exercise of the powers conferred on them by section 552(4A)(b), (4B) and (4C) of the Income and Corporation Taxes Act 1988(1), hereby make the following Regulations:

Citation and commencement

1.  These Regulations may be cited as the Life Assurance and Other Policies (Keeping of Information and Duties of Insurers) Regulations 1997 and shall come into force on 1st April 1997.

Interpretation

2.—(1) In these Regulations unless the context otherwise requires—

“the Board” means the Commissioners of Inland Revenue;

“relevant records”, in respect of a policy or contract, means the books, documents and records specified in regulation 3;

“Schedule 15” means Schedule 15 to the Taxes Act;

“section 552” means section 552 of the Taxes Act(2);

“the Taxes Act” means the Income and Corporation Taxes Act 1988.

(2) For the purposes of these Regulations, an “insurer”—

(a)in a case where the obligations under any policy or contract of the body that issued, entered into or effected it (“the original insurer”) are at any time the obligations of another body (“the transferee”) to whom there has been a transfer of the whole or any part of a business previously carried on by the original insurer, means the transferee, and

(b)in any other case, means the body by or with whom the policy or contract was issued, entered into or effected.

(3) For the purposes of these Regulations and in relation to an insurer, a policy or contract is a relevant policy or contract if, on the happening of a chargeable event within the meaning of Chapter II of Part XIII of the Taxes Act in relation to the policy or contract, the insurer is under the duty to deliver a certificate pursuant to section 552; and, for the purposes of this paragraph, subsection (2) of section 552 shall be disregarded.

(4) For the purposes of these Regulations and in respect of any policy or contract, any reference to books, documents and records includes books, documents and records (including material prepared for the purposes of advertising or publicity) which contain information—

(a)relating to the terms of the policy or contract, or

(b)required for the purposes of a certificate to be delivered under section 552.

Keeping of records—general

3.  An insurer shall, in respect of each relevant policy or contract, keep sufficient books, documents and records to enable the Board—

(a)to ascertain the terms of the policy or contract,

(b)to ascertain whether there has been or is likely to be any contravention of the requirements of section 552, and

(c)to verify any certificate delivered under that section.

Period for which records to be kept

4.—(1) Subject to paragraph (2), an insurer shall, in respect of each relevant policy or contract, keep the relevant records for a period of three years after the termination of the policy or contract.

(2) In any case where—

(a)a relevant policy is connected with another policy for the purposes of paragraph 13 or 14 of Schedule 15, or

(b)in relation to a relevant policy under which a single premium only is payable, liability for that payment is discharged in accordance with paragraph 15 (2) of Schedule 15, or

(c)a relevant policy is issued in substitution for, or on the maturity of and in consequence of an option conferred by, another policy,

an insurer shall, in respect of each policy, keep the relevant records for a period of three years after the termination of the final policy which is in force.

Transfers of records

5.—(1) This regulation applies in any case where the obligations under any policy or contract of the body that issued, entered into or effected it (“the original insurer”) are at any time the obligations of another body (“the transferee”) to whom there has been a transfer of the whole or any part of a business previously carried on by the original insurer.

(2) The original insurer shall, in respect of that policy or contract, deliver the relevant records to the transferee within the period of three months after the transfer.

(3) This regulation has effect in relation to transfers on or after 1st April 1997.

6.—(1) This regulation applies in any case where each of the three conditions specified in paragraphs (2) to (4) is fulfilled.

(2) The first condition is that one policy (the “new policy”) is issued in substitution for another policy (the “old policy”).

(3) The second condition is that the new policy is issued in substitution for an old policy issued by an insurance company (the “old insurer”) which was resident outside the United Kingdom at the time the old policy was issued.

(4) The third condition is that the new policy is issued by an insurance company (the “new insurer”) pursuant to arrangements made between the old insurer and the new insurer for the issue of policies in substitution for ones held by persons becoming resident in the United Kingdom.

(5) The new insurer shall, in respect of the old policy, obtain the relevant records from the old insurer within the period of three months after the issue of the new policy.

(6) This regulation has effect in relation to any new policy where the insurance for that new policy is made, and that new policy is issued, on or after 1st April 1997.

7.—(1) This regulation applies in any case where each of the conditions specified in paragraphs (2) and (3) is fulfilled.

(2) The first condition is that one policy (“the new policy”) is issued in substitution for, or on the maturity of and in consequence of an option conferred by, another policy (“the old policy”).

(3) The second condition is that, at the time the new policy is issued, the insurance company issuing the new policy (“the new insurer”) and the insurance company which issued the old policy (“the old insurer”) are both members of a group of companies.

(4) For the purposes of paragraph (3) two companies are members of a group of companies if one is the 51 per cent subsidiary of the other or both are 51 per cent. subsidiaries of a third company.

(5) The original insurer shall, in respect of the old policy, deliver the relevant records to the new insurer within the period of three months beginning with the date on which the new policy was substituted for the old policy or, as the case may be, the date of the exercise of the option on the maturity of the old policy.

(6) This regulation has effect in relation to any new policy where the insurance for that new policy is made, and that new policy is issued, on or after 1st April 1997.

Information to be provided to the Board

8.—(1) The Board may by notice require any person to whom premiums under any policy are or have at any time been payable, within such period as may be specified in the notice, to furnish them with such information as they may reasonably require to enable them—

(a)to ascertain whether there has been or is likely to be any contravention of the requirements of section 552, and

(b)to verify any certificate delivered under that section.

(2) The period specified in a notice given under paragraph (1) shall be a period of not less than 14 days beginning with the date on which the notice is given.

Inspection of records by officer of the Board

9.—(1) The Board may by notice require any person to whom premiums under any policy are or have at any time been payable, to make available for inspection by an officer of the Board authorised for that purpose, at such time as that officer may reasonably require, all such books, documents and records as are in that person’s possession or under that person’s control and are such as may be required by the Board under regulation 8.

(2) The time specified in a notice given under paragraph (1) shall not fall within the period of 14 days beginning with the date on which the notice is given.

S. C. T. Matheson
G. H. Bush
Two of the Commissioners of Inland Revenue
10th February 1997

Explanatory Note

(This note is not part of the Regulations)
Section 552 of the Income and Corporation Taxes Act 1988 (“section 552” and “the Taxes Act” respectively) requires an insurer to deliver a certificate to the inspector of taxes where a chargeable event within the meaning of Chapter II of Part XIII of the Taxes Act has happened. (The meaning of a “chargeable event” is given by sections 540(1), 542(1) and 545(1) of the Taxes Act in relation to a policy of life insurance, a contract for a life annuity and a capital redemption policy respectively.) These Regulations make provision for securing that the Commissioners of Inland Revenue (“the Board”) are able to ascertain whether there has been or is likely to be any contravention of the requirements of section 552 and to verify any certificate delivered under that section.
Regulation 1 provides for citation and commencement and regulation 2 for interpretation.
Regulation 3 requires an insurer to keep sufficient records to enable the Board to ascertain the terms of the policy or contract, to ascertain whether there has been or is likely to be any contravention of section 552 and to verify any certificate delivered under that section.
Regulation 4 makes provision for the period for which record are to be kept.
Regulations 5, 6 and 7 make provision for records to be transferred. Regulation 5 applies in any case where there is a transfer of the obligations under any policy or contract; regulation 6 in certain cases where an insurance company issues a policy in substitution for a policy issued by another insurance company which was resident outside the United Kingdom at the time the original policy was issued; and regulation 7 in certain cases where an insurance company issues a policy in substitution for, or on the maturity of, a policy issued by another insurance company, and the two companies are both members of a group of companies.
Regulations 8 and 9 empower the Board to obtain information and to inspect records.


(1)
1988 c. 1; subsections (4A) to (4C) of section 552 were inserted by section 57(2) of the Finance Act 1995 (c. 4).

(2)
Section 552 was amended by paragraph 7 of Schedule 9 to the Finance Act 1989 (c. 26) and by section 57(1) and (2) of the Finance Act 1995.