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Natalie Holt
WPA offers high-excess corporate policy to cut IPT
Private medical insurer WPA has devised a high-excess PMI policy for companies that reduces the cost of insurance premium tax.
Insurers base their pricing for PMI corporate policies on a company’s previous claim experience, creating a claim fund.
As the premium is based on claims experience, much of the claim fund is risk-free, as it is likely the company will claim up to a certain amount.
But IPT, which is set to rise from 5-6 per cent in January, applies to the whole premium, including the risk-free element.
WPA has developed a corporate deductible scheme that insures the actual risk for companies with between 200 and 500 employees.
The insurer has sought advice from HM Revenue & Customs, which has confirmed that the scheme is valid.
WPA says some companies that have moved to the corporate deductible scheme have made annual savings of between £25,000 and £150,000.
A WPA spokesman says: “Corporate deductible is essentially a high-excess policy for companies and is an effective way of reducing IPT costs.
“Large corporate insured schemes should consider making the switch to a corporate deductible scheme to achieve significant cost savings with no impact on benefit provision.”
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