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HMRC internal manual

General Insurance Manual

Technical provisions: Schedule 11 FA2007: paragraph 2 enforcement: introduction to and restriction on use

FA07/SCH11/PARA2 allows an officer of HMRC to require a general insurer as defined at GIM6520 to provide a report (at the insurer’s expense) as to whether and what extent the technical provisions exceed the appropriate amount.

FA07/SCH11/PARA2 supplements, but does not replace, the power to require the production of documents and provision of information during a tax enquiry (FA08/SCH36). The power is analogous to that appearing in section 166 of the Financial Services and Markets Act 2000, which is the Financial Services Authority’s power to require an authorised insurer to provide a report by a skilled person about relevant matters.

The purpose of the power is to provide a method to resolve disputes about whether and, if so, the extent to which an insurer’s technical provisions exceed the appropriate amount. It will enable the officer to require the production of an independent expert view about the technical provisions and provide a sound technical basis for settling disputes before needing to refer disputes to the Tribunal system. It operates to supplement the methods set out in the appropriate amount Regulations, which may involve the confirmation of an opinion given by a skilled person (see GIM6610).

Restrictions on use: Sector Leader role

As explained at GIM6510, formal exercise of the powers is expected to be rare. A special report is likely to be expensive and frequently a summary of internal actuarial work will be sufficient. If a report is required, careful consideration must be given to its scope. GIM6550 has further details.

FA07/SCH11/PARA2 (1) makes clear that the power can only be used during a tax enquiry. As a matter of policy its use must be sanctioned on every occasion by the Sector Leader within the Large Business Service responsible for insurance.