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HMRC internal manual

Insurance Policyholder Taxation Manual

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HM Revenue & Customs
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Audit of insurers: records to be maintained

Regulations lay down what records insurers need to keep, for how long and HMRC’s powers to obtain information and inspect the records maintained by the insurer.

The insurer must keep sufficient records to enable HMRC to

  • verify the terms of the policy or contract
  • verify any certificate delivered under the reporting requirements in ICTA88/S552, and
  • confirm whether there has been, or is likely to be, any failure in the insurer’s obligation to report relevant events.

 

The relevant regulations are SI1997/265 - Life Assurance and Other Policies (Keeping of Information and Duties of Insurers) Regulations 1997.

Computer records

Where these records are held on computer the insurer will need to provide the auditors with the means of obtaining such information. On-line access may be preferable in cases where, for example, image systems are used to store key document and correspondence.

Documents to be made available

Although not an exhaustive list, the auditors will want to see, or have available on request, the following documents

  • the policy or contract schedule or, if not possible, the information that would be included on the document
  • transaction details including all premiums paid and money withdrawn
  • details of any changes to the policy, including changes to the life assured or policy owner
  • full details of any chargeable events including dates and values and any relevant correspondence
  • information and/or documentation to confirm the issue of a chargeable event certificate and the details shown on that certificate.

 

Auditors may also need to see other records and may check an insurer’s systems and procedures.

Retention of records

In general, records should be retained for a period of three years from the termination of the policy or contract.

However, where a new policy is

  • issued in substitution for the policy or on the maturity of the policy following the exercise of an option in the policy, or
  • connected to the policy for the purpose of the qualifying policy rules - IPTM8085

 

the time limit for retention of records is extended to three years from the termination of the final policy issued in substitution for or connected with earlier policies.

Further reference and feedback IPTM1013