FSA delays review of FSCS funding model indefinitely
The FSA is delaying its funding review of the Financial Services Compensation Scheme (FSCS), Biba has confirmed.
The review was scheduled to begin later this month and was eagerly anticipated by brokers who reacted angrily to massive hikes in the FSCS portion of their FSA fees and levies.
The FSA told Biba: "In response to industry calls to look at the funding arrangements for the FSCS following the large scale defaults in 2008 and 2009, the FSA began an extensive review at the end of last year.
"This focused on areas such as the composition of the classes, how much each class could be asked to pay annually, and whether the levy allocation should reflect an element of the degree of risk posed by an individual firm to the FSCS.
"We have been very grateful for your involvement and helpful suggestions throughout this work. However, there have been a number of dependencies throughout this review, including European proposals and changes to the regulatory landscape with the creation of the PRA and CPMA, which may have potential consequences for the structure and funding of the FSCS – and with this in mind, we believe it would not be appropriate to consult on funding arrangements at this time, as we originally planned."
The FSA has not yet set a new consultation date.
Hundreds of brokers have backed the Insurance Times Fair Fees campaign which calls on the FSA to give general insurance brokers a fairer deal when it sets its fees and levies.
Biba's head of compliance and training, Steve White, said: “The unfairness of the current FSCS funding model continues to be Biba’s number one lobbying issue. We have now finalised a matching programme, which provides us with the name of each member’s local MP.
“Once the FSA’s consultation paper is issued, we will provide members with both a template response document plus a template letter to go to MPs. This will be the most appropriate time and way to get our key messages on this issue to the key influencers.”