IPTM7245 - Audit of insurers: breaches of the reporting rules

Breaches of the rules in the chargeable event reporting regime include:

• issuing incorrect chargeable event certificates
• not issuing chargeable event certificates where required
• not recognising or recording changes in the qualifying status of a policy or contract.

Sample testing

Where the auditors can reasonably conclude that errors exist throughout the rest of the portfolio, or a particular part of it, they will request further statistical review work to be carried out by the insurer so the full extent of the failure can be established.

Recovery and penalties under TMA70/S98

Where an insurer fails to provide chargeable event gain details to HMRC or the policyholder in the form of a chargeable event certificate, a maximum penalty of £300 will be applied. Where an insurer has issued a chargeable event certificate containing incorrect information, a maximum penalty of £3,000 will be applied. This maximum figure will be abated using the method described here.