Context
The FCA has published a document, with no accompanying news item, setting out a series of notes about how the FSCS levy is calculated. The FCA has also previously issued a Guidance Sheet aimed specifically at insurance distribution firms.
Key points to note
- The document explains that the FSCS levy is made up of two elements – the management expenses levy (made up of base costs – operating costs not directly related to the payment of compensation, and specific costs – operating costs that are directly related to the payment of compensation arising from valid claims), and the compensation costs levy.
- The compensation costs levy provides the funds to make valid compensation payments.
- For further details of the FSCS levy for 2022/23 for insurance distributors, see here.
- The document contains tables showing how the management expenses levy base costs were calculated, per Contribution Group, and how the management expenses levy specific costs and the compensation levy costs were calculated, per Tariff Base.
- General insurance distribution is Class A019 and Tariff Base CLGID-1 (which replaced Tariff Base SB02).
Next actions
None – for information and awareness.