general information

 

The Financial Services Authority recently issued a Consultation Paper CP 08/08 FSCS funding – Tariff Changes.

This Consultation Paper puts forwards proposals for changes to the tariff measures for FSCS levies.It will affect some sub-classes where a move to an income based tariff measure is proposed (as shown in Table 1.1 of the CP).  

Mortgage Broker /Insurance Broker/IFA

If your are involved in general insurance intermediation or home finance intermediation (mortgage advice) – there is no change as the existing tariff is based on annual eligible income.

IFA

You will be affected if your firm is involved in life and pensions or investment intermediation as we are proposing to move from the existing tariff measure of Approved Persons to annual eligible income.

Stockbroker/Fund Manager

You will be affected if your firm is involved in investment fund management, investment intermediation or life and pensions intermediation as we are proposing to move from the existing tariff measure of Approved Persons to annual eligible income.

Key sections of the CP are in Chapter 2:

Paragraphs 2.21 – 2.26      investment fund management

Paragraphs 2.27 – 2.41     investment intermediation and life and pensions intermediation

We would also draw your attention to the section relating to the practical implementation of the new tariff measure in paragraph 2.55 of Chapter 2.

We are aiming to implement these new measures for the 2009/10 levy period.

Important message for all firms included in the general insurance intermediation sub-class - the exclusion of pure protection business.

For the 2008/09 levy period eligible income for the general insurance intermediation sub-class should not include income from pure protection business (term assurance, critical illness, permanent health insurance. This falls into the life & pensions sub-class for the purposes of the FSCS funding

We are giving firms the opportunity to re-submit their annual eligible income for general insurance excluding pure protection, if they feel it will make a material difference. Our estimates indicate that for firms that have reported less than £100,000 total insurance income will receive minimal reduction and it is any change in data submitted is unlikely to be sufficient to warrant the cost of identifying and re-submitting data.  However, if you do more than £100,000 of protection business, you may wish to re-submit your data exclusive of income from pure protection business or you will be levied this year on the higher figure.

Firms wanting to submit revised data to the FSA should do so via email to feetariffreturns@fsa.gov.uk by 17th May 2008.