FSCS Levy - it's gone up a bit!

[James Sharp]

We have just recieved our our annual FSA invoice, including the FSCS Levy. In our case the levy has gone from about £2,000 to a few quid short of £20,000. Ok, we grew by 30% during the period, but the levy has gone up by 1,000%.

Has anybody else seen a similar increase yet?

[Allan Gambles]

Earlier thread on this:
http://forum.broking.co.uk/showthread.php?t=200111

[James Sharp]

Yes, we budgeted for approx a 6-7 fold increase; because of our continued growth and the market speculation. But, a 10 fold increase is about 50% above our worst estimates.

[Michael Cranny]

Its not just the immorality surrounding the sale of PPI - in which the Banks, the Money Lenders and Insurers all conspired to cheat the customer, nor the greed of the solicitors looking for swill in the trough, but the cowardice of those responsible, then putting their businesses into liquidation so that the innocent insurance broker picks up the bill for something they never did.

Banks should be banned from ever taking part in any form of insurance.
Insurers should be held to account for failing to supervise the sharp practice of those who sold their policies.

Wasn't there something called TCF? Does it only apply to insurance brokers?

[Allan Gambles]

James. Got our bill now. Our tariff data income has increased by 17% but FSCS levy has gone up by 767%. They were proposing at one time a retrospective levy for 2009/10 so presumably have added more to the 2010/11 levy instead.

[James Sharp]

H'mm. It is rather like every wind farm and and hydro electric scheme in the UK picking up the bill for BP's oil spill... 4,500 miles away.

[onlyjustintime]

What other industry applies such rules? We GI Brokers have had regulation and all that goes with it imposed on us so must must do what we are told or else. There seems to be a message that the public must be protected and educated about the big bad financial world, but we are are all tarred by the same brush regardless of size or sector. What about protecting us (the public) from other financial risks? There are big problems with the likes of unscrupulous builders, roofers, double glazing and conservatory fitters doing shoddy and unfinished work after taking up front payments and then disappearing or winding up leaving innocent people out of pocket and distressed. Can you imagine what would happen if the building trade had to pay a levy? This country does not need more regualtion. Thankfully this new Government has recognised that too much regulation has had a negative effect. Lets hope we all benefit from the proposed changes to the BoA and FSA.

[Tizza]

The issue we have is that we used the FSA calculator in March 2010 to work out potential budgeted cost for fees and this has proved to be substantially flawed with regards to the FSCS Sub Class Compensation Costs Levy.

This fee seems to have gone up by a further 50% from the already massively increased costs originally proposed. I gather that despite the FSCS waiving the £20m interim levy for 2009/1- the required levy for 2010/11 on GI has gone up from £50.5m to £61.4 an increase of 22% but the fees have gone up by nearly a further 50%. This seems massively disproportionate!!

Has anyone any ideas why this is?

[andrewtj]

Just spoke to the FSCS who said they set the total but the FSA sets the individual amounts so any questions need to go to the FSA . . . apparently

[andrewtj]

It seems the total levy has risen from £8.5m to £61.4m for GI intermediation - a rise of 722%

Looks like they are just making everybody pay the same increase . . .

www.broking.co.uk/1593889