Read what brokers have said about the FSCS levy and send us your comments
In recent weeks Insurance Times has asked readers for their responses to the massive increase in the Financial Services Compensation Scheme (FSCS) levy in the FSA's 2010/11 regulatory fees and levies, and they've piled in.
Brokers have flooded us with their own accounts of the staggering fees that they are being forced to pay to the regulator to cover the cost of payment protection insurance mis-selling.
Insurance Times has launched the Fair Fees campaign and to keep up the momentum, we want more of your feedback. Or, email us: email@example.com.
To get you started, here’s a taster of what brokers have been saying so far:
"Normally I would not be the sort of person to write to the press but I have today had my invoice from the FSA which has gone up from £500.00 to £1814.00 in a year. This equates to around 12% of income and I am told by my compliance company that there is nothing I can do about this. I presume that everyone else will be hit by these stunning increases which I feel will take some firms over the threshold of whether it is worth staying in business at all. Is there anything you can do to help us." John Baczkowski, Argent Insurance Services.
"Our firm has seen the fee increased by 93%. This is wholly unfair. The vast majority of the insurance broking community has never been involved in such products, and the legacy has been fuelled by other vendors such as banks and retailers and we are picking up the bill for their actions. It is an absolute shambles. This firm is no more a bank than it is a grocer. It is no wonder Mr. Cameron is abolishing this regime, no foresight, no common sense, no more. The sad irony is it is likely to be the same faces coming up with similar madness under the FSA's replacement." Jullian Shawcross, Peter Hattersley & Partners.
"I have today received an invoice from the FSA Relating to Regulatory Fees & Levies 01/04/2010 31/03/2011 for a total amount of £3,049.37 compared with last years £500.00! Treating customers fairly, I think not!" Tom Cooper, Coops.
"I have just been reading your editorial about FSA charges. I too have suffered an increase from about £2600 last year to over £5300 this year simply because of the massive increase in the compensation levy. We are regulated purely as general insurance brokers. As to resolution, well the ideal is for abolition of the FSA and for regulation to be undertaken by the Bank of England of financial institutions only with a simple levy on those of us involved purely in general insurance based on premium turnover and/or employee numbers." Paul Phelps, Service Insurance.
"Further to your article in Insurance Times dated 17th June 2010, entitled ‘A good place to vent your FSA fees fury’, we would like to add our voice to the concerns raised regarding the rise in FSA fees this year due to the Financial Services Compensation Scheme (FSCS). We have seen our fees rise by over 120% and feel this is grossly unfair as this would appear to be based on having to subsidise PPI claims through no fault of our own. We believe that with such a rise there should be sufficient justification given as to why the FSA believe it necessary to impose this upon us." John Hutchison, Insure and Go.
"I am a small broker operating in Knaresborough, North Yorkshire. This morning my FSA bill arrived. Last year the total I paid was £581.00 whereas this year they are asking for £1759.00. Having spoken to them they seem to have two main reasons for this.
"1. There is a new minimum contribution of £1000.00 which is more than 100% more than last year. Why is this? It is totally unfair!
"2. There is a compensation scheme levy of approx £800.00 for claims arising from the mis-selling of PPI insurance. I don't even sell PPI insurance, so why am I having to make any contribution, never mind such a high one?
"I look forward to receiving some sort of credible explanation as soon as possible from the FSA. As it stands it appears to me that this is a blatant attempt to price small firms like mine out of the market. I already pay a small fortune in order to maintain and develop the compliance standards of my firm!" Andrew Bull, Andrew Bull Insurance Services.
"I have not yet had my formal notice of the new FSA fees but I understand I will have to pay more than twice the amount I paid last year. Whilst I have previously paid the minimum and hope to do so this time, I find it extremely frustrating as an owner broker working on my own that I have to pay for others under the FSA umbrella. I do not do pensions, financial products, life insurance, mortgages, deal with members of the public, handle client money etc. But I have to pay for it. As a small brokerage this is simply another on cost for what? What does the FSA do for me. Complain to the FSA, not likley. This needs to be addressed now otherwise it will be too late and no doubt forgotten about by the end of the year and we will be told to shut up and make do with it." Simon Moulson, Trade Credit Solutions.
"The contribution element to the FSCS, of our overall charges, has increased from £149 last year to £1,149 this year. Small businesses like ours are just not going to continue to survive at this rate. have to say it is an absolute scandal that such agencies can get away with such increases in these charges without question or challenge. I would be grateful if Mark Hoban would look into this as a matter of urgency. The FSCS principle is all well and good but the practice of tarring everyone with the same brush as used for banks and the like is ludicrous and will end up as a principle that removed another, that of consumer choice with literally thousands of small local insurance brokers shutting up shop." Craig McGowan, McGowan Corporate Solutions.