FSCS funding review revived
by Gill Montia
Story link: FSCS funding review revived
The Financial Services Authority (FSA) is to restart its Financial Services Compensation Scheme (FSCS) funding review.
The review began in October 2009 but was put on hold 12 months later due to uncertainties around the impact on the FSCS of UK regulatory reform and ongoing developments in the EU.
However, HM Treasury has now published its proposals on the future structure, rule making arrangements and accountability of the FSCS, and further progress is being made on the EU Deposit Guarantee Schemes Directive.
In light of these developments, the FSA has decided it’s time to restart its FSCS funding model review, looking at issues such as the composition of the nine funding classes, the levy thresholds applicable to each, and their tariff bases.
The British Insurance Brokers’ Association (BIBA) has recently presented a 7,000 signature-strong petition to Parliament regarding the delay, having argued strongly that increased FSCS levies on insurance brokers during the last three years have been caused by the failures of credit brokers, who have mis-sold payment protection insurance.
BIBA is demanding that professional insurance brokers are separated out from secondary sellers when it comes to the FSCS funding model.
The petition also called for the acceleration of the FSA’s consultation, which should now take place in the first half of 2012 and will be led by Sheila Nicoll, the regulator’s director of conduct policy.