FCA levy on insurers and brokers to increase by 8.5% in 2015/16

The FCA is planning to increase its fees on brokers and insurers by 8.5% for the 2015-16 year.

Under FCA plans, insurers will see their fees go up by 8.5% to £24.7m from £22.8m, while brokers could see their fees go up by 8.5% to £28.1m from £25.9m.

Overall the regulator is pushing up the levy on financial services by 8.4% to £481.6m from £446.4 in 2014-15.

The increase will cover the cost of the FCA’s regulatory activities, with fees for individual firms based on the areas they undertake.

According to a statement from the FCA today, it will use the funds to roll out the plans it has set out in its 2015/16 business plan.

The FCA is planning to conduct a market study to investigate how insurance companies use big data in its 2015/2016 financial year.

It also wants to review the role of appointed representatives in distributing general insurance products.

Its business plan for 2015/16 will also include work on pensions, a market study into competition in investment banking and implementing the Parliamentary Commission on Banking Standard’s recommendations on accountability and the development of its IT systems.

The FCA has said 38% of regulated firms will continue to pay the minimum fee which will increase to £1084 from £1000, the first increase since 2010.

Chief executive Martin Wheatley added: “These proposals seek to share the cost of being regulated and ensure the FCA has the right resources in place to deliver appropriate protection for consumers and make markets work well.”

The consultation closes on 18 May 2015, and the FCA expects to confirm the changes in summer 2015.

The FCA will aslo separately collect fees for the Money Advice Service (MAS) and Ombudsman Service.

Today’s publication also sets out the proposed fees for MAS and the Ombudsman Service.

• · The FCA will collect £23.3m on the Ombudsman’s behalf, which is the same amount that was asked for in 2013/14.

• · The FCA will also collect £79.1 million on behalf of MAS. Their overall budget for 2015/16 is £81.1m which is the same as last year. However as the energy and water industries are voluntarily contributing £2m to debt advice, the amount levied on financial services firms will be 2.5% lower than last year.

In addition the FCA has proposed fees for firms offering consumer credit, the pension guidance levy, which covers the cost of the government’s Pension Wise initiative, and the Payment Systems Regulator, which fall, outside the FCA’s annual funding requirement.