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Financial Services Compensation Scheme Supplementary Levy for 2017/18
RWA has been made aware that the FCA has begun invoicing most general insurance brokers with regards to a Financial Services Compensation Scheme (FSCS) supplementary levy.
RWA has made some enquiries to the FCA to find out what this levy is for and has been informed that the FSCS sent notification out in their January Outlook newsletter. There was also a letter sent from the FSCS in March 2018 regarding the levy.
What is the levy for?
The levy is to cover the life and pensions intermediation class compensation pool, and the ‘Retail Pool’ has to contribute £24 million by way of this levy.
What is the Retail Pool?
Broadly, the Retail Pool is the description used to indicate the firms that make up the bulk of regulated firms who advise the 'retail' sector, i.e., consumer and commercial clients on insurance, mortgage, and investment matters.
The amount each broker is set to pay is set below and is taken from the FCA website. See the link at the bottom of this article to view the full table.
|
FSCS class |
FSCS class description |
Tariff base |
Class share of the Retail Pool |
Estimated levy |
|
B2 (SB02) |
General insurance intermediation |
Annual eligible income (AEI) |
£7.58m |
£0.87 per £1,000 of AEI |
To view a more detailed explanation of this levy, please follow this link to the appropriate page on the FCA website.
https://www.fca.org.uk/firms/fees-and-levies/fscs-supplementary-levies-2017-18
If you have a query, please contact your RWA business adviser in the normal manner.