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AMII Initiative Leads To Landmark Agreement For Electronic Transfer Of Underwriting

The Association of Medical Insurers and Intermediaries (AMII) has announced that the UK PMI industry has reached a landmark agreement to adopt the electronic transfer of underwriting direct between insurers.

The move follows an industry-wide consultation led by AMII Executive Chairman Stuart Scullion who described the breakthrough as “an immensely proud moment.”

Announcing the news, Mr. Scullion praised the “vision and determination” of insurers for enabling the change – which had previously been “deemed too difficult to achieve” by others but, led by AMII, has taken just 12 weeks to be agreed and implemented.

The new pan-industry arrangement will start on July 1, 2020, for business transferring between insurers for company schemes, both SME and corporate. It will involve a number of new protocols for intermediaries and insurers, irrespective of whether they are AMII members or not.

The processes being adopted, for which training of operational and customer-facing staff at a number of major health insurers of is currently taking place, will involve the transfer of encrypted data files to nominated email addresses at each insurer as a secure data transfer.

For larger insurers, the process will be automated, with greater manual intervention for smaller firms. A five working day industry-wide service level has also been agreed.

Mr Scullion said: “The Covid-19 Coronavirus has forced all of us to adopt working practices and processes to meet Government social distancing and self-isolating guidelines.

“It makes no sense for intermediaries to visit their offices to collect membership certificates and underwriting to facilitate policy transfers to another provider when there is a readymade solution at our fingertips.

“I am immensely proud of what we have been able to achieve as an industry in adopting a digital process to exchange personal data and underwriting directly between insurers.

“It’s an agreement which has no doubt been accelerated by the once-in-a-lifetime circumstances created by the Coronavirus, and the challenges faced by the PMI industry driven by GDPR and the new Data Protection Act.

“There have been many challenges to overcome as we sought to agree a process and establish a protocol, and I want to extend my personal thanks to the representatives of all those insurers who have shown the vision and determination which has enabled this to happen."

For more information on AMII, visit www.amii.org.uk.

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Insurance Premium Tax Increase Will Affect 3 Million Private Medical Insurance Policies

The standard rate of Insurance Premium Tax - the tax paid each time an insurance policy is purchased in the UK – rose from 6% to 9.5% on the 1st November 2015.

This change will affect:

  • 7.3 million car policies
  • 4.7 million household policies
  • 3 million pet policies
  • 3 million private medical insurance policies

Any of the affected insurance policies with a start date after 31 October will have IPT charged at the new rate. This is likely to add the following to premiums:

  • Nearly £13 to the average comprehensive motor insurance policy
  • More than £10 to the average combined building and contents cover.
  • More than £10 to average pet insurance
  • More than £40 to average private medical insurance

The Government exempts the following products from IPT:

  • Life insurance
  • Mortgage insurance
  • Insurance for spacecraft
  • Commercial ships and aircraft
  • International railway rolling stock
  • Lifeboats and lifeboat equipment
  • Goods in international transit

Higher rate IPT remains unchanged at 20% and applies to:

  • travel insurance
  • warranties for some mechanical and electrical goods

This means that a family with two cars, a pet and medical insurance is likely to have to pay almost £100 a year more.

James Dalton, Director of General Insurance Policy at the ABI, said, "Whether you are a homeowner, driver, own a pet or buy medical insurance, millions of people across the country face being hit in the pocket by this rise in Insurance Premium Tax. Whether it’s a legal requirement or you want to buy extra cover, insurance is a financial safety net, not a luxury.

"While insurance remains one of the most competitive industries in the UK, its affordability can’t be taken for granted. Further tax increases must be avoided if insurance is to remain accessible for all.”

According to the Treasury the IPT increase will bring in an additional £8.1bn for the Treasury by 2021*. This was the second largest revenue raiser in the Summer Budget.

Insurance Premium Tax was first introduced to the UK in 1994. The rise on 1 November is the 4th increase in the standard rate since its introduction.

  • From 1 October 1994, a single rate of 2.5% was charged
  • 1 April 1997: increased to 4%
  • 1 July 1999: increased to 5%
  • 4 January 2011: increased to 6%
  • 1 November 2015: increased to 9.5%

*This is according to HMRC’s own figures summarising the impact of the move

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