As reported by Money Marketing this week, the Association of British Insurers advised providers to delay telling their clients that their applications have not met the April 6 deadline cut-off.
In a circular, the ABI said it was aware of “significant volumes” of PTA cases which has still not been processed due to insurers awaiting final details such as medical evidence.
The ABI confirmed that it had approached HMRC and HMT to seek a further extension to April 6 deadline.
HMT and HMRC released a statement today confirming that insurers will now have until midnight on 31 July to process pipeline PTA business.
The statement says: “Insurers will now have until midnight on 31 July 2007 to process this business, so that appropriate medical evidence can be checked and an appropriate commencement date for cover settled.”
ABI director general Stephen Haddrill says: “The Government’s decision to remove tax relief from PTA was unnecessarily complex and bad for consumers. We are pleased that the Government has worked with the ABI to find solutions to the some of the problems the Budget statement led to. We look to it to learn from the review of the way in which it handled the PTA issue that it is currently undertaking.
“We will press politicians of all parties to raise the issue during Parliamentary debates on the Finance Bill. Politicians of all parties will want to know why it is no longer possible to get tax relief on life assurance cover bought with a personal pension.”
Lifesearch head of protection strategy Kevin Carr says: “In recent months we have strived to get as many cases through as possible before the deadline, and we welcome the decision as there are still some cases yet to go through.”
Royal Liver IFA market manager Andy Milburn says: “What a joke. Not the extension of the deadline, but the fact that there are are still apparently large numbers of PTA applications in providers new business pipelines nearly four months after the product was pulled. Providers should have been far more proactive about this over the last few weeks rather than sitting there waiting for advisers to sort this out by themselves.”