Brokers’ levy would fall 3.1%
The FSA will raise its levy on general insurers by 36.7% to £40.1m for the 2012/13 year under proposals published in a consultation paper today.
The average levy for all financial firms would rise by 15.6% for the period, to £578.4m from £500.5m the year before.
The FSA said the above-average increase for insurers would pay for more “intensive and intrusive” supervision and enforcement costs for the overall funding block that insurers fall into.
However, insurance brokers would see their FSA levies drop by 3.1% under the proposals.
Brokers are classed as ‘general insurance mediators’ by the FSA, which includes firms such as banks and mortgage brokers. This class paid £24.9m in 2011/2012 but would pay £24.2m under any new scheme.
“They are talking about a slight reduction for general insurance mediation, so you could say we are grateful for small mercies,” said Biba head of compliance and training Steve White.
The regulator said this was “likely” to be the last funding overhaul before it splits into the Prudential Regulation Authority and the Financial Conduct Authority.
The overall increase will pay for this restructure, upgrading the FSA’s IT and tackling its goals for this year.
The goals include implementing Solvency II, supervising firms, enforcement and consumer protection schemes such as the retail distribution review.
FSA chief executive Hector Sants said: “We are mindful of any increase in costs to industry and have continued to maintain headcount and keep core operating costs in line with inflation.
“Nevertheless the AFR is still rising as we implement the government’s regulatory reform programme and invest in the necessary long term IT infrastructure.”
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