UK life insurance
provider LV= has launched a website for advisers on the forthcoming
EU gender directive and I-E tax changes.
The EU gender directive means that from 21
December 2012, which is known as ‘G Day’, premiums and
benefits for all new insurance contracts will have to be calculated
on a gender-neutral basis.
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Insurance spans a wide range of contracts
that currently use gender as a risk rating factor. This includes
life and health protection and retirement annuities.
‘I-E’ refers to the UK taxation regime
that currently allows providers to offset the costs of their life
insurance business, from the profits made on their
investments.
For new policies and business written from
1 January 2013, this will no longer be allowed.
Costly impact
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By GlobalDataLV= argues that while this change will
raise more revenue for HM Treasury, it is set to increase life
insurance costs for insurers, which may be passed on to consumers
through higher premiums.
According to LV=, the effect of the I-E
tax changes is likely to remove any advantageous changes in
premiums resulting from the EU Gender Directive. For example, it
argues that the removal of tax relief for some providers will
result in premiums increasing by as much as 10%.
All ‘new’ individual income protection,
critical illness and life insurance policies fall under the EU
Gender Directive, says LV=.
The provider adds that group protection
arrangements will fall outside of the EU gender directive and they
can still be calculated on gender specific rates.
