HMFSA2450 - General information: Why do we not accept insurance policies?

The financial security must be an agreement between the HMRC and a third party (i.e. approved financial institution). An insurance policy is an agreement between the policyholder (i.e. the person paying the premiums) and the financial institution. Its validity depends upon several factors, including payment of the premiums by the policyholder. Even where a trader offers to make HMRC a beneficiary under the terms of an insurance policy, this is unacceptable. It would not provide the necessary relationship between the financial institution and HMRC.