Sickness disability and unemployment insurance: the regulatory position
The Financial Services Authority regulates the insurance industry through the FinancialServices and Markets Act 2000. Different categories of insurance business are regulated indifferent ways and to different extents.
Although it makes no practical difference to the tax treatment for the policyholderoutlined at IPTM6110 onwards, for regulatory purposes there isa distinction between sickness, disability and unemployment policies of not less than 5years in length, and those of under 5 years in length.
Policies of not less than 5 years in length are regulated as Contracts ofLong-Term Insurance, falling in Category IV - Permanent Health.
Policies of less than 5 years in length are regulated as Contracts ofGeneral Insurance falling in either Category I or II - Accident or Sickness.
The category into which insurance business falls is relevant to the taxation of insurersthat write such business. The taxation of insurers is dealt with in the General InsuranceManual (GIM) and the Life Assurance Manual (LAM).
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