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Winners - Life Insurance Innovation award - November 08, 2016

"Most Innovative Actuarial / Risk Consultancy Services Provider Of The Year” The Life Insurance International awards For use of Big Data in MUMS and MUBA services The Life Insurance International awards were announced on November 17th at a Gala dinner in London ...

Contact

Protection underwriting

Life_Sales_link

We operate a complete new business application service for several insurers, and many componenent parts of new business adminstration services including:

We reduce costs, increase speed and reduce non-disclosure.

We have completed over 400,000 cases over 10 years with only one contested case.  We have never had a case submitted to the FOS (Financial Ombudsman Service), or equivalent bodies in Ireland or Germany.

Claims Management

Claims_link

We provide claims services for the efficient and empathetic management of Protection claims:

Retirement

Retirement_Income_link

Our world leading Tele-Interview service enables the speedy and efficient collection of medical information from consumers.

Consumers:-

  • Enjoy a simpler, fairer and faster process
  • Are relieved of the arduous task of completing long application forms
  • Are reassured they are getting the best deal for their retirement

Advisers:-

  • Enjoy an effortless and faster process, allowing them to concentrate on advising clients

Insurers:-

  • Increase the number of annuities and the speed at which they are placed "on the books"
  • Eliminate the need for GPRs
  • Improve the quality of business
  • Improve underwriting and so accuracy of longevity estimates

Regulatory bodies:-

  • Favour the use of independent, impartial medical assessment

Medically Underwritten DB Pension schemes

PLUS_link

We work with EBCs and Pension consultants to facilitate tenders for bulk annuity buy out and buy in transactions for defined benefit pension schemes

We have an agreed medical underwriting service with the four participating insurance companies: Aviva, Just Retirement, Legal & General and Partnership, all of which will reimburse our fee if a transaction is completed.

The service has already resulted in transactions being completed with savings averaging at 12%.

We use purpose built secure bespoke IT systems to record all data and share with the insurance providers, thus ensuring data is secure and confidential.

VAT free – MorganAsh set legal precedent with HMRC

In 2006 MorganAsh succeeded in a legal case with the UK tax authorities (HMRC) establishing that the MorganAsh Tele-Interview service is exempt from VAT. The ABI projected that this would save the UK insurance industry £100 Million per annum.

After several years of discussion MorganAsh instigated legal proceedings with the UK tax authorities HMRC (Her Majesties Revenue and Customs). The following includes the official correspondence from HMRC and the ABI.

 

Confirmation from HMRC

 

The following is an extract from the HMRC web site:

http://www.hmrc.gov.uk/manuals/vatinsmanual/vatins5340.htm

“VATINS5340 - Services of an Insurance Intermediary: Introductory services: Medical services

Following the tribunal decision in Morganash, certain insurance related medical services fall within the insurance exemption

 

Morganash Ltd

 

Morgan ash provided services to life insurers by conducting telephone interviews with persons seeking life assurance. A registered nurse prepared a health report for the insurer who used the information to decide whether or not to provide cover and the level of premium required. The Tribunal found that, in the light of the Andersen decision, the services provided by Morgan ash would not be covered by the exemption under EC law because Morgan ash were not bringing together the parties to the insurance contract. However, the Tribunal concluded that such services came within the exemption in current UK law as the carrying out of work preparatory to the conclusion of contracts of insurance, since without the information about the applicant’s health the insurer would be unable to conclude the insurance contract.

As a result of this decision we accept that businesses supplying medical services to insurers in connection with the setting up or administration of insurance policies are able to exempt their supplies under the current Group 2 until UK law is amended to take account of the Andersen decision. In the meantime, businesses wishing to treat insurance related medical services (which do fall within the health exemption) in accordance with EC law are able to treat them as taxable.”

 

Confirmation from the ABI

 

On 28th November 2006, the UK insurance trade body, ABI (Association of British Insurers) wrote to all members, following conversation with HMRC.

Dear Member

 

Medical Fees Paid By Insurers Likely to Remain VAT Exempt

 

Summary: Following a recent VAT Tribunal medical fees relating to insurance transaction are likely to remain exempt from VAT. This might save insurers up to £100 million a year and is good news for the industry.

 

HMRC have been consulting on introducing VAT on certain medical fees to bring the UK medical exemption for VAT in line with European Court of Justice decisions. The result would have meant that most medical fees paid by insurers would have been subject to tax from next year.

Morganash, a recent VAT tribunal case, considered whether medical services relating to insurance transactions could be exempt under the VAT exemption for insurance. The case involved a company that obtained medical details of a potential policyholder by telephone to assist an insurer's assessment of the risk. The Tribunal decided that the service was exempt from VAT under the UK (but not the EU) insurance exemption.

Following discussions with the ABI, HMRC have confirmed that they will not be appealing the decision and are considering the options for action that will need to be put to Ministers.

HMRC is reluctant to amend the current UK VAT rules while the EU is reviewing the insurance exemption. Consequentially the ABI believes it is likely that Ministers will decide that medical fees for expert services paid by insurers (but only insurers) will remain exempt from VAT; this includes medical fees for both underwriting and claims. It is expected that other medical fees in relation to expert services will attract VAT from next year. 

A formal announcement on the proposed changes to the VAT treatment of medical services is likely to be made around Christmas. If, as the ABI expects, HMRC decide to exempt medical services in respect of insurance transactions, they have indicated that they will monitor the position closely. In particular, any attempt by taxpayers to make arrangements that HMRC consider abusive will be challenged and might lead to HMRC deciding to amend UK exemption.

Yours faithfully

L J Francis, Taxation Manager

Since this letter written in 2006, to MorganAsh knowledge, there has been no changes in the VAT status.

 

Further HMRC confirmation

 

On 30 January 2007, HMRC issued a business brief. The specific extras are replicated below:-

Revenue & Customs Brief 06/07

VAT: changes to the exemption for medical services from 1 May 2007

Insurance-related medical services

http://www.hmrc.gov.uk/briefs/brief0607.htm

Business Brief 29/03 issued in December 2003 gave details of certain services - such as

conducting a medical to assess the level of insurance premiums - which were specifically

considered by the ECJ and ruled to be outside the scope of the health exemption, and therefore taxable. The Business Brief explained that doctors and other health professionals were not required to take any action to register for VAT or charge VAT on these services until such time as HMRC formally implemented the changes.

Although such services will no longer qualify under the health exemption, in a recent tribunal case - Morganash Ltd (MAN/05/0749) - a ruling was given that medical services which were undertaken for the purpose of enabling a provider of life assurance to decide whether to accept a proposal for a policy fall within the scope of the UK exemption for insurance-related services, pending the implementation of the ECJ decision in the case of Andersen (C-472/03). HMRC have decided not to appeal this case and, as a result, accept that insurance-related medical services related to the setting up of contracts, the administration of policies or handling of claims, will remain exempt from VAT, pending any amendment of the UK exemption for insurance services.

Further, the following services will qualify as exempt under the health exemption as being principally for the purposes of protecting, maintaining or restoring the health of the individual concerned:

  • Health screening under private medical insurance policies - these are regular check-ups to detect early signs of disease income/credit protection insurance - medical services where the policy holder has fallen ill (as opposed to losing their job) which are aimed at assisting the individual in returning to a normal life
  • Motor insurance - where medical services are provided under a policy to assist in enabling an injured motorist to return to full health and/or work. (Note - this does not include medicals undertaken for DVLA purposes to ensure initial or continued fitness to drive which are liable to VAT at the standard rate)
  • Any other medical service provided in connection with an insurance policy where the principal aim is to assist in restoring the health of the individual.

 

Medical services provided for the purpose of valuing insurance policies for tax purposes, such as inheritance tax, will become liable to VAT at 17.5%.

 

We operate a complete new business application service for several insurers, and many componenent parts of new business adminstration services including:

We reduce costs, increase speed and reduce non-disclosure.

We have completed over 400,000 cases over 10 years with only one contested case.  We have never had a case submitted to the FOS (Financial Ombudsman Service), or equivalent bodies in Ireland or Germany.


We provide claims services for the efficient and empathetic management of Protection claims:


Our world leading Tele-Interview service enables the speedy and efficient collection of medical information from consumers.

Consumers:-

  • Enjoy a simpler, fairer and faster process
  • Are relieved of the arduous task of completing long application forms
  • Are reassured they are getting the best deal for their retirement

Advisers:-

  • Enjoy an effortless and faster process, allowing them to concentrate on advising clients

Insurers:-

  • Increase the number of annuities and the speed at which they are placed "on the books"
  • Eliminate the need for GPRs
  • Improve the quality of business
  • Improve underwriting and so accuracy of longevity estimates

Regulatory bodies:-

  • Favour the use of independent, impartial medical assessment

We work with EBCs and Pension consultants to facilitate tenders for bulk annuity buy out and buy in transactions for defined benefit pension schemes

We have an agreed medical underwriting service with the four participating insurance companies: Aviva, Just Retirement, Legal & General and Partnership, all of which will reimburse our fee if a transaction is completed.

The service has already resulted in transactions being completed with savings averaging at 12%.

We use purpose built secure bespoke IT systems to record all data and share with the insurance providers, thus ensuring data is secure and confidential.


In 2006 MorganAsh succeeded in a legal case with the UK tax authorities (HMRC) establishing that the MorganAsh Tele-Interview service is exempt from VAT. The ABI projected that this would save the UK insurance industry £100 Million per annum.

After several years of discussion MorganAsh instigated legal proceedings with the UK tax authorities HMRC (Her Majesties Revenue and Customs). The following includes the official correspondence from HMRC and the ABI.

 

Confirmation from HMRC

 

The following is an extract from the HMRC web site:

http://www.hmrc.gov.uk/manuals/vatinsmanual/vatins5340.htm

“VATINS5340 - Services of an Insurance Intermediary: Introductory services: Medical services

Following the tribunal decision in Morganash, certain insurance related medical services fall within the insurance exemption

 

Morganash Ltd

 

Morgan ash provided services to life insurers by conducting telephone interviews with persons seeking life assurance. A registered nurse prepared a health report for the insurer who used the information to decide whether or not to provide cover and the level of premium required. The Tribunal found that, in the light of the Andersen decision, the services provided by Morgan ash would not be covered by the exemption under EC law because Morgan ash were not bringing together the parties to the insurance contract. However, the Tribunal concluded that such services came within the exemption in current UK law as the carrying out of work preparatory to the conclusion of contracts of insurance, since without the information about the applicant’s health the insurer would be unable to conclude the insurance contract.

As a result of this decision we accept that businesses supplying medical services to insurers in connection with the setting up or administration of insurance policies are able to exempt their supplies under the current Group 2 until UK law is amended to take account of the Andersen decision. In the meantime, businesses wishing to treat insurance related medical services (which do fall within the health exemption) in accordance with EC law are able to treat them as taxable.”

 

Confirmation from the ABI

 

On 28th November 2006, the UK insurance trade body, ABI (Association of British Insurers) wrote to all members, following conversation with HMRC.

Dear Member

 

Medical Fees Paid By Insurers Likely to Remain VAT Exempt

 

Summary: Following a recent VAT Tribunal medical fees relating to insurance transaction are likely to remain exempt from VAT. This might save insurers up to £100 million a year and is good news for the industry.

 

HMRC have been consulting on introducing VAT on certain medical fees to bring the UK medical exemption for VAT in line with European Court of Justice decisions. The result would have meant that most medical fees paid by insurers would have been subject to tax from next year.

Morganash, a recent VAT tribunal case, considered whether medical services relating to insurance transactions could be exempt under the VAT exemption for insurance. The case involved a company that obtained medical details of a potential policyholder by telephone to assist an insurer's assessment of the risk. The Tribunal decided that the service was exempt from VAT under the UK (but not the EU) insurance exemption.

Following discussions with the ABI, HMRC have confirmed that they will not be appealing the decision and are considering the options for action that will need to be put to Ministers.

HMRC is reluctant to amend the current UK VAT rules while the EU is reviewing the insurance exemption. Consequentially the ABI believes it is likely that Ministers will decide that medical fees for expert services paid by insurers (but only insurers) will remain exempt from VAT; this includes medical fees for both underwriting and claims. It is expected that other medical fees in relation to expert services will attract VAT from next year. 

A formal announcement on the proposed changes to the VAT treatment of medical services is likely to be made around Christmas. If, as the ABI expects, HMRC decide to exempt medical services in respect of insurance transactions, they have indicated that they will monitor the position closely. In particular, any attempt by taxpayers to make arrangements that HMRC consider abusive will be challenged and might lead to HMRC deciding to amend UK exemption.

Yours faithfully

L J Francis, Taxation Manager

Since this letter written in 2006, to MorganAsh knowledge, there has been no changes in the VAT status.

 

Further HMRC confirmation

 

On 30 January 2007, HMRC issued a business brief. The specific extras are replicated below:-

Revenue & Customs Brief 06/07

VAT: changes to the exemption for medical services from 1 May 2007

Insurance-related medical services

http://www.hmrc.gov.uk/briefs/brief0607.htm

Business Brief 29/03 issued in December 2003 gave details of certain services - such as

conducting a medical to assess the level of insurance premiums - which were specifically

considered by the ECJ and ruled to be outside the scope of the health exemption, and therefore taxable. The Business Brief explained that doctors and other health professionals were not required to take any action to register for VAT or charge VAT on these services until such time as HMRC formally implemented the changes.

Although such services will no longer qualify under the health exemption, in a recent tribunal case - Morganash Ltd (MAN/05/0749) - a ruling was given that medical services which were undertaken for the purpose of enabling a provider of life assurance to decide whether to accept a proposal for a policy fall within the scope of the UK exemption for insurance-related services, pending the implementation of the ECJ decision in the case of Andersen (C-472/03). HMRC have decided not to appeal this case and, as a result, accept that insurance-related medical services related to the setting up of contracts, the administration of policies or handling of claims, will remain exempt from VAT, pending any amendment of the UK exemption for insurance services.

Further, the following services will qualify as exempt under the health exemption as being principally for the purposes of protecting, maintaining or restoring the health of the individual concerned:

  • Health screening under private medical insurance policies - these are regular check-ups to detect early signs of disease income/credit protection insurance - medical services where the policy holder has fallen ill (as opposed to losing their job) which are aimed at assisting the individual in returning to a normal life
  • Motor insurance - where medical services are provided under a policy to assist in enabling an injured motorist to return to full health and/or work. (Note - this does not include medicals undertaken for DVLA purposes to ensure initial or continued fitness to drive which are liable to VAT at the standard rate)
  • Any other medical service provided in connection with an insurance policy where the principal aim is to assist in restoring the health of the individual.

 

Medical services provided for the purpose of valuing insurance policies for tax purposes, such as inheritance tax, will become liable to VAT at 17.5%.

 


Winners - Life Insurance Innovation award - November 08, 2016

"Most Innovative Actuarial / Risk Consultancy Services Provider Of The Year” The Life Insurance International awards For use of Big Data in MUMS and MUBA services The Life Insurance International awards were announced on November 17th at a Gala dinner in London ...

Contact