Health insurance and cash plans should be treated as a zero-rated insurance cover product like life and critical illness cover, AMII chairman Stuart Scullion told a packed annual conference yesterday.
Scullion applauded the Chancellor’s decision to leave Insurance Premium Tax (IPT) untouched in the Budget, but warned every 1 per cent increase in the tax leads 31,000 Britons a year to depend solely on the NHS for all of their healthcare, citing research from Bupa.
The research, carried out by Cebr, suggests IPT is contributing to thousands of individuals giving up their policies, resulting in nearly 200,000 customers cancelling their policies in the past three years,
Scullion warned that IPT increases have the greatest impact on older people with riskier health profiles who pay higher premiums.
In a wide-ranging speech at the event, which attracted record numbers of AMII members, Scullion spelt out AMII activities ranging from engaging with the House of Lord EU Home Affairs Select Committee for Health & Education into Reciprocal Healthcare Arrangements post Brexit and regular dialogue on healthcare matters, including IPT, with Craig Tracey, MP who is Chair of the All Parties Committee for Insurance & Financial Services. AMII members’ interests have also been represented in responses to FCA consultation papers CP17/21 and CP17/33 on the Insurance Distribution Directive which becomes a regulatory requirement in February 2018, he said.
Scullion said: “I am delighted HM Treasury decided not to impose further increases on IPT in the Autumn Budget this week. From conversations I have had prior to the Budget I understand Philip Hammond has commented on seeing increased commentary and resistance in relation to IPT. AMII has positively contributed alongside some of our corporate member firms and other industry bodies in relation to that lobbying.
“However, we must keep up the pressure. We are calling on the Government to commit to stability for IPT in relation to healthcare during this Parliament, however long that might be, by freezing the rate of Insurance Premium Tax on healthcare spend.
“And we are asking the Government to reappraise how health insurance and cash plans are treated in the fiscal system in line with other zero-rated insurance products such as life or critical illness.”