There are a number of international regimes which require that UK financial institutions collect and maintain information about the residence (and in the case of the USA also the citizenship) of individuals and entities for whom they maintain financial accounts. The USA’s Foreign Account Tax Compliance Act (FATCA) and the OECD’s Common Reporting Standard (CRS) are examples.
Financial institutions must identify any account holders which are resident in a large number of reportable jurisdictions (outside the UK), or are US citizens, and file a report with HMRC annually by 31 May each year.
In the context of insurers, contracts which have a surrender value will be in scope and, even where such policies have only ever been sold in the UK, it is likely that at least some policyholders may now be living abroad and/or be US citizens and therefore need to be reported.
Since the number of countries with which the UK has agreed to share financial account information under CRS is expected to increase, financial institutions are expected to record the territory of residence for all relevant account holders, not only those which are currently reportable. As there is no de minimis value threshold for CRS purposes, the “due diligence” procedures required to collect this information may be onerous.