GIM1020 - Legal basis of insurance: no statutory definition

There is no statutory definition of insurance in either the Taxes Acts or the Financial Services and Markets Act 2000 (FSMA 2000). ICTA88/S431 (2) defines an insurance company for the limited purposes of Part 12 of the Act as:

1. a person (other than a friendly society) who has permission under Part 4 of the Financial Services and Markets Act 2000 to effect or carry out contracts of insurance, or
2. an EEA firm of the kind mentioned in paragraph 5(d) of Schedule 3 to that Act or a firm qualifying for authorisation under Schedule 4 to that Act which

• carries on business which consists of the effecting or carrying out of contracts of insurance, and
• carries on that business through a branch or agency in the United Kingdom.

In this definition “contract of insurance” has the meaning given in Article 3 of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001. This in turn refers to Schedule I to the Order, which classifies contracts of insurance between “contracts of general insurance” and “contracts of long-term insurance”, in Part 1 and Part 2 respectively. Part 1 divides general insurance into 18 different classes of insurance business for regulatory purposes. The word “insurance” itself is left undefined.