Overseas insurers: relevant insurances: residence of policyholders
One of the criteria for a policy or contract to be a relevant insurance isthat the policyholder is resident in the UK. It will normally be obvious whether apolicyholder is resident in the UK but the residence status may be unclear in some casesand if so, it will depend on the particular circumstances.
Determining residence from information in the insurers possession
An insurer is not required to take active steps to establish whether an individualpolicyholder is resident in the UK - that is a matter for HMRC. The insurer must actaccording to the residence status that is indicated by the information in its possession,both in deciding whether it is required to have a tax representative and whether it needsto provide information about a chargeable event on a policy held by a particularpolicyholder.
An insurer does not need to ask policyholders for information that it does not need forbusiness reasons or take active steps to determine where policyholders are resident.However, if any administrative unit of the insurer receives information that is relevantto a policyholders residence status, particularly if it suggests current UKresidence, then the insurer must treat that information as being in its possession and actupon it. This means that an insurer should have systems in place to ensure that relevantinformation is passed to the unit responsible for compliance with the reporting rules.
Information relevant to a policyholders residence
If the insurer has a live correspondence address for the policyholder then it shouldtreat the policyholder as resident in the country in which the address falls, unless ithas other information indicating that the policyholder is actually resident in anothercountry. If the insurer has reason to believe that the address is not where thepolicyholder lives, but has no information about the policyholders place ofresidence, then there is no requirement for the insurer to establish the place ofresidence unless it chooses to do so for its own purposes.
The strongest evidence an overseas insurer will have about residence is what thepolicyholder tells the insurer. However, there may be circumstances in which the insurerhas no information about where a policyholder lives at the time of the event eitherdirectly from the policyholder or via an intermediary. In the absence of any contraryevidence, an insurer should assume that the policyholder is resident in the UK if
- it receives a request to pay the policy benefits to an address in the UK
- it receives a request to pay policy benefits on maturity or surrender directly to a UK bank or building society account, or
- a new policy is sold through a UK-based intermediary and the insurer has not received any notification of an overseas address either at the time of the sale or subsequently.
Policies held on trust
A body of trustees is treated as a single policyholder. There are special rules fordetermining whether a body of trustees is UK resident - see IPTM9230.
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