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HMRC internal manual

General Insurance Manual

Technical provisions: Schedule 11 FA2007: paragraph 2 enforcement: scope and procedural issues

FA07/SCH11/PARA2 allows an officer to require a general insurer to provide, at its expense, a report as to whether (and the extent to which) its technical provisions exceed the appropriate amount.

The purpose of this power is discussed in GIM6540. The person appointed to make the report is discussed at GIM6560. Appeals against a notice and penalties for failure to comply with a notice are discussed at GIM6570 and GIM6580. 

The report: scope and procedural issues

FA07/SCH11/PARA2 is widely drawn so that the requirement can be tailored to the particular enquiry and the scope of the notice limited so that the report addresses only the precise issues that remain to be resolved.

The wording on the notice to produce a report is important (see GIM6560). Where the officer has taken actuarial advice during the enquiry it is likely to be appropriate also to take advice on the precise scope of the report required and the phrasing of the notice. The report is aimed at enabling disputes to be resolved when all other avenues have been exhausted. In many cases the general insurer should be consulted on the scope of the report, although the wording of the final notice remains a matter for the officer to determine.

In accordance with general practice on the issue of information notices (EM2213) an informal request will be made in advance of a formal notice. Officers will take the opportunity to set out clearly the remaining areas of dispute and what appears to be required in order to resolve them, bearing in mind that Sector Leader approval is needed for the issue of a formal notice.

A notice under FA07/SCH11/PARA2 serves a purpose which is different from a notice under FA08/SCH36 issued as part of the evidence-gathering during an enquiry. It follows that it may be appropriate with the informal request to invite further representations or discussions in an effort to avoid the need for further formal action.

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Number of days for production

The number of days for production of the report should, if possible, be agreed between the parties. The legislation specifies not less than 30 days. Guidance at EM2217 and EM2250 about the time allowed to comply with information notices is relevant here. In particular, the period should take account of the complexity of the remaining issues. Actuarial advice may assist in arriving at a suitable period.

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Form of notice

The form of the notice is not prescribed.