The FSA has scrapped plans to require wholesale brokers and insurers to contribute to a high-level funding pool of the Financial Services Compensation Scheme (FSCS).
The regulator had proposed a ‘wholesale’ pool as part of its reform of the FSCS, which would have added between £1bn and £2bn of funding to the scheme.
This week the FSA said that while there were “sound policy reasons” for creating the pool, it had decided not to proceed with it.
“This decision follows careful consideration of the feedback received during the consultation, and the legal basis of the constitution and potential impact,” the FSA said in a statement.
The FSA confirmed the new funding arrangements for the FSCS which will operate from 1 April 2008.
The new scheme introduces a 'widening circle' of funding under which costs are shared more widely.
ATE broker closed
A Manchester insurance broker has been closed by the FSA after investigations revealed that the firm was selling insurance without underwriting in place, leaving clients uninsured.
Michael Young (also known as Mohammad Younas Yousaf) was the managing director, and Asif Habib Malik was the financial director, of M Young Legal Associates (MYLA) which sold after-the-event legal expenses policies.
