L&G reports new Aviva protection products over legal ‘conflicts’


Insurers including Legal & General and Royal London are disputing whether Aviva’s new business protection products are allowable within tax rules, Mortgage Strategy’s sister title, Money Marketing, can reveal.

Aviva launched two new products on the Aviva Life Protection Solutions platform last month including a “market first” relevant life insurance with the option to add critical illness cover.

Money Marketing understands several rival providers are questioning the critical illness option with L&G confirming it is to raise the issue with HMRC.

An L&G spokeswoman says: “The addition of critical illness conflicts with our current interpretation, and that of the market, of the Government legislation with regard what is allowed within a relevant life plan.

“We are currently re-examining the legislation and will be raising the issue with the HMRC to get further clarity on the situation.”

The spokeswoman adds L&G will add the option if HMRC gives assurances it meets legislative requirements.

Royal London product architect Ian Smart says: “We are looking at this closely to form our own opinion as to whether this is actually possible but have concerns that this could prompt HMRC to think again about whether the legislation around relevant life policies is working as originally intended.”

An Aviva spokeswoman says: “On our Relevant Life launch we have liaised with HMRC and taken legal advice on this from a QC who has confirmed that our product is compliant with the relevant legislation and therefore qualifies as a relevant life plan. We take great care to assess our products before putting them into the market.”

HMRC could not be reached for comment.