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From 1st April 2011 all Employers' Liability insurers will collect data from those of its current policyholders with Employers' Liability (EL) Insurance.
This data will be collated by the Employers' Liability Tracing Office (ELTO) and be fed into the national Employers' Liability Database (ELD) allowing employees to access (via the ELTO website at www.elto.org.uk) their employer's EL Insurance details going forward.
Policyholders will be asked to supply their Employer Reference Number (ERN), which is a unique tax identifier for employers. It is often referred to as an employer's PAYE reference. The ELD will show the corresponding EL insurer and policy number for the appropriate policy period.
Employers' Liability has been compulsory now since the Employers' Liability (Compulsory Insurance) Act of 1969, although for some employers, cover was in place before this date.
Employers' Liability claims are dealt with on an 'occurred' basis i.e. claims are set against the policy in force at the time the injury is determined to have taken place. For current injuries, the process of identifying the employer's EL insurer is relatively straightforward but for claims relating to historical disease or injuries at work, particularly asbestos related or noise induced deafness claims, determining the insurer at the time can prove difficult.
Since 1999 the ABI, Lloyd's and the balance of the insurance industry complied with a voluntary code of practice providing a manual tracing service for EL policies for when a claimant could not establish an insurer's identity. This ABI EL Tracing Service had varying rates of success being a very manual time consuming process.
Following work by the Department for Work and Pensions, the insurance industry and the FSA decided to form the Employers' Liability Tracing Office (ELTO) to run a new Employers' Liability Database (ELD). This will be operational from 1st April 2011 and accessible by all at www.elto.org.uk.
The ELTO is an independent industry body, its purpose is to assist claimants who have suffered injury or disease caused during their employment, to identify the EL insurer relevant to the period of employment.
The ELD will contain the following records:
It is anticipated that the FSA will bring forward regulations requiring all EL insurers to publish all current policies on the website in a searchable format.
All new and renewal cases will be added to the EL Database going forward.
All insurers have now joined the ELTO and will be supplying records direct to the database from 1st April 2011.
However there is a major exercise to undertake where we, as brokers, must establish each clients' Employer Reference Number (ERN). This will have to be supplied to the database by us, but also to insurers so that they can link their record to the appropriate ELD record.
All subsidiary companies and their ERN's will also have to be recorded.
UK businesses employing one or more people are required to hold an ERN, which is the reference number for the employees' income tax and national insurance contributions. There is an exemption where the employer pays all their employees below the PAYE threshold (which at the time of writing is £503 monthly).
Each ERN is unique to the empployer and will not be replicated. On PAYE records the format for most numbers allocated since 2001 is NNN/Aznnnnnn, where NNN is a 3 digit number for the Tax Office whose catchment area the employer falls into and Aznnnnn is the ERN, where n is numeric and A and z are letters. For numbers allocated before 2001, the format is NNN/Annnnn in the majority of cases.
No retrospective changes are made to an employer's ERN. Therefore, even if the employer is taken over, ceases trading or moves tax office, the ERN for a specific point of time is permanent.
The ERN is printed or written on mandatory documents including P45, P60, P11/D, and on most payslips. Enquirers might not always have this information to hand, so the intention is for HMRC to include the ERN in its responses to employee requests for their employment schedule. This is a list of an individual's employers and dates of employment. The data is drawn from the National insurance Contributions Office (NICO) database which is linked to the PAYE database.
The Database will become mandatory with sanctions and it may become an offence if not supplied by 1st April 2012. In reality however it may take until December 2012 for every firm's information to be 'live'.
Currently only limited historical data will be populated (see bullet points above).
However, whilst not in ELTO's current remit we anticipate once the EL Database is fully populated going forward, there will be moves towards collection of retrospective data.
If you are a client of Rowlands & Hames and an employer and have not already provided your ERN, or should you have any questions relating to ELTO or the ELD, please contact us.