IPTM6155 - Sickness disability and unemployment insurance: the regulatory position

The Financial Services Authority regulates the insurance industry through the Financial Services and Markets Act 2000. Different categories of insurance business are regulated in different ways and to different extents.

Although it makes no practical difference to the tax treatment for the policyholder outlined at IPTM6110 onwards, for regulatory purposes there is a distinction between sickness, disability and unemployment policies of not less than 5 years in length, and those of under 5 years in length.

Policies of not less than 5 years in length are regulated as Contracts of Long-Term Insurance, falling in Category IV - Permanent Health.

Policies of less than 5 years in length are regulated as Contracts of General Insurance falling in either Category I or II - Accident or Sickness.

The category into which insurance business falls is relevant to the taxation of insurers that write such business. The taxation of insurers is dealt with in the General Insurance Manual (GIM) and the Life Assurance Manual (LAM).