insurancepeople
News
FSAannual funding requirement T
he Annual Funding Requirement (AFR) for 2011/12, announced by the FSA, is £500.5m, up from £454.7m, a gross increase of 10.1%. The Authority comments:
“The increase will be borne
by larger firms, reflecting the resources applied to intensive supervision of high impact firms. However, the enforcement fines the FSA imposes during the previous year are returned to the industry by way of discounts to their fees
news outweighs good IIB says bad I
n the recently announced FSA fees and levies for 2011/12 the bad news outweighs the good, says the Institute of Insurance Brokers. They comment that, “While FSA fees could reduce for many brokers, increases in levies will outstrip any savings.” Acknowledging that the FSA’s annual funding requirement for the year is £500.5 million, an increase of 10.1% on the previous year, the Institute adds that record fines and penalties collected by FSA during the last year (around £79m) will be offset against the funding requirement so that, “..... overall the cost to regulated firms will be roughly the same as last year”.
The fee block into which insurance brokers generally fall (A19) has a funding requirement falling from £30.8m to £24.9m, says the IIB, so “... brokers’ fees
for the forthcoming year should be significantly lower than last year”.
The Financial Services Compensation Scheme (FSCS) levy is estimated to fall from £474m to £240m, but the IIB says, “... the levy on insurance intermediaries, largely to pay for mis-selling by credit brokers, is expected to rise by more than 50% from £61m to £93.5m.” Overall the Institute comments, “Despite the prospect of lower FSA fees for insurance brokers, the total amount payable by brokers during 2011/12 is likely to increase due to increased levies from the FOS (Financial Ombudsman Scheme) and the CFEB (Consumer Financial Education Body) and, in particular, due to a massive rise in the FSCS compensation levy.”
Jubilee enters terrorism market J
ubilee Managing Agency has entered the terrorism market, bringing in Marcus Ripley, former terrorism underwriter at Hardy, to lead the account’s development. While at Hardy, Mr Ripley underwrote global terrorism risks, both as a lead and following market, under all political violence wordings from strikes to war.
24 insurancepeople MARCH 2011
in the following year. This means that in total firms will pay 2% less than last year. “Most firms authorised by the FSA pay a minimum fee, with further variable fees to be paid depending on the type of business a firm conducts. The
AMII condemns FSCS levy increase
T
he Association of Medical Insurance Intermediaries (AMII) has condemned “the proposed 57% increase in this year’s Financial Services Compensation Scheme (FSCS) levy on its members as unfair, excessive and totally inappropriate”. Andrew Tripp, chairman of the AMII, says that the increase is on top of an eight-fold increase last year and is mainly a result of compensation payments for PPI mis-selling. “As almost all AMII members never sold any of these
policies, it is unfair that they are footing the bill on an equal basis. This huge increase has come out of the blue totally and will have a serious impact on many intermediaries.”
AMII believes the FSA should review and address the funding of the FSCS immediately and not leave it for another year, as has been suggested, because “the financial damage to smaller intermediaries could have a serious impact on growth and jobs”.
Cooper Gay launches European Markets unit T
he launch of Cooper Gay European Markets is
intended to provide clients with “a consistent, timely and balanced service for their risk protection needs”, pooling the expertise of Cooper Gay representatives in Hamburg, Paris and London.
Following Lloyd’s approval, the managing agency has created a bespoke terrorism account for 2011 that will work alongside its existing property team within syndicate 5820.
The new Jubilee team will initially concentrate on physical damage and business interruption losses from physical destruction.
Covering a range of property, terrorism and liability insurance and reinsurance risks, the 20- strong team will place and service both wholesale insurance and facultative reinsurance business in the European and international marketplaces, including Lloyd’s and the London company markets. Malcolm Harvey, head of business, European Markets, Cooper Gay, says, “This is an
gross minimum fee for firms will remain unchanged from last year but, taking into account the enforcement fines discount, the net minimum fee will be 9.4% less than last year; 43% of the FSA’s authorised firms will only pay the minimum fee.”
important development in Cooper Gay’s strategic expansion of its strong non-marine offering in Europe. The restructure will give clients, both in Europe and further afield, one simple route to our integrated European non-marine expertise, with fast access to worldwide markets.”
Malcolm Harvey
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