CRA rules that member organizations were recipients of the insurance arranged through their umbrella association

A non-profit umbrella association (the “Association”) of member organizations (the “Organizations”) contracted to acquire directors’ and officers’ liability insurance for those of its members who were interested. Both it and such participating Organizations were named in the policy as the insureds and it was billed global premiums by the insurer which it would then bill out to the member participants based on an allocation worked out by the insurance broker. If a participating member wished to initiate an insurance claim, it would reach out directly to the broker.

In ruling that the Association was not required to charge HST on the reimbursement payments received by it, CRA stated:

[I]t is the Insurer that is making a supply of insurance to the Organization and the Association is making a separate supply of the membership to the Organization.

Such supply by the insurer was an exempted supply of an insurance policy.

Neal Armstrong. Summary of 3 August 2022 GST/HST Ruling 229371 under ETA s. 123(1) – recipient.