VATINS5250 - Services of an insurance intermediary: insurance brokers and insurance agents:decision of Westinsure Group Ltd [2014] UKUT 452 (TCC)

In 2014 the Upper Tier Tribunal considered the characteristics of insurance intermediary services in the case of Westinsure. Westinsure provided insurance brokers with a package of support services, including training and networking opportunities and access to the Westinsure “Partner Insurers” and their beneficial rates of commission and exclusive products. Westinsure charged the brokers both a membership fee and an annual fee based on the broker’s actual gross premium income.

The Upper Tier Tribunal upheld the First Tier decision and concluded that these services did not qualify for exemption under item 4.

Particularly relevant points were:

• Westinsure did not act as an insurance agent as it did not act on behalf of insurers in arranging contracts of insurance.
• Neither did Westinsure act as a broker as it did not introduce people seeking insurance to insurers in the same way that an insurance broker did. The characteristic services of a broker require the broker to have a relationship, direct or indirect, with the insured.
• The supplies were too remote from insurance transactions since Westinsure was outside the direct supply chain between the insurer and the insured through which the insurance contracts were arranged.