Brokers’ fees will increase by 9% under new FSC proposals
Gibraltar’s Financial Services Commission (FSC) is proposing to increase its 2014 fees by 12% for general insurers and 9% for brokers.
Under the changes, a general insurer writing less than £10m of gross written premium (GWP) would see their annual FSC fee increase by £2,574 to £24,024, while a general insurer writing more than £10m of GWP would pay £2,844 more with an annual fee of 26,544 (see table below).
General insurance brokers would see a fee increase of £509, taking their annual fee to £6,159.
The FSC said the increase for insurers and brokers was driven by the need to bolster its regulations in preparation for the implementation of Solvency II on 1 January 2016, as well as Gibraltar’s new legal and regulatory regime.
The FSC said: “Developing the new regulatory regime and enhancing the supervisory approach will require the commission to invest in additional staff with financial, risk management and actuarial skills and to incur additional costs where it decides that work requiring those skills should be outsourced.”
It added that the increase for brokers was driven by the new version of the European Union’s insurance mediation directive, known as IMD II, which will be adopted this year and implemented in 2016.
The FSC said: “The new directive will lead to additional work for the FSC, which will require the Commission to allocate additional resource to such supervision.”
Companies have until 5pm on Friday 4 April to respond to the proposals.
Early evidence suggests companies will take the change in their stride.
Gibraltar-based motor insurer Markerstudy, which falls into the over £10m premium bracket, will face “a small impact” from the fee hike, according to underwriting director Gary Humphreys.
He said: “I’m not really surprised, because of the increase in the amount of regulation that’s involved, particularly with the run-up to Solvency II.”
“I wouldn’t be overly concerned by it.”
Gibraltar FSC proposed regulator fees
|Old (£)||New (£)||Change (£)||Change (%)|
|General insurance intermediary||5,650||6,159||509||9.0|
|Life assurance intermediary||5,650||6,159||509||9.0|
|EEA – Insurance Mediation [IMD] branch||5,600||6,104||504||9.0|
|Insurance (general) GWP <£10m||21,450||24,024||2,574||12.0|
|Insurance (general) GWP >£10m||23,700||26,544||2,844||12.0|
|Insurance general (captive and reinsurers)||4,745||5,314||569||12.0|
|Insurance long-term (insurers, reinsurers and protected cell companies)||29,750||33,320||3,570||12.0|
|Insurance long-term (captive and reinsurers)||11,800||13,216||1,416||12.0|
|Protected cell companies (general insurance and reinsurance)||4,745||5,314||569||12.0|
|Protected cell companies (general insurance and reinsurance per cell)||1,775||1,988||213||12.0|