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Home > Prudential Regulation Authority > PRA fees and FSCS levies for insurers: proposals for a transitional approach in 2017/18 - CP30/16
 

PRA fees and FSCS levies for insurers: proposals for a transitional approach in 2017/18 - CP30/16

09 September 2016

Overview

In this consultation paper (CP) the Prudential Regulation Authority (PRA) sets out proposals for a one year transitional arrangement for insurance firms’ PRA fees and Financial Services Compensation Scheme (FSCS) levies for the 2017/18 fees year.

The CP is relevant to insurance firms falling into the A3 (general insurance) and A4 (life insurance) fee blocks, FSCS levy classes B1 (general insurance) and C1 (life insurance), the FSCS (for the purposes of the SCS levy only), the Society of Lloyd’s and policyholders. This CP is in addition to the usual annual consultations of fees and the FSCS management expenses levy limit (see related links).

Currently, the Fees and Policyholder Protection Parts refer to data reported by firms in accordance with the previous ‘Solvency I’ insurance reporting regime.  Following the introduction of Solvency II and the policy for non-Directive firms (NDFs) set out in PRA Policy Statement (PS) 19/16 ‘Reporting requirements for non-Solvency II insurance firms’ (see related links), the PRA needs to amend those references for firms within the scope of Solvency II and make consequential amendments for NDFs so that PRA fees and FSCS levies are calculated on the basis of data available under the new regulatory reporting requirements.

Summary of Proposals

The PRA is proposing a twelve month transitional period whereby the calculations for the 2017/18 fee and FSCS levy year, for both Directive and non-Directive firms, are based on the last set of Solvency I data received. This means that fees and levies for both the 2016/17 and 2017/18 fee years will be based on the returns received for the relevant insurance firm’s financial year ending during 2015 (‘Solvency I data’). This is data that the authorities already have, so firms will not be required to provide any new data for the 2017/18 fee and levy calculation unless an adjustment is appropriate, as described below.

The PRA also proposes to allow submissions of updated data on a Solvency I calculation basis for the year ending in 2016, where a relevant insurance firm has gone into run-off between the end of the firm’s financial year ending in 2015 and 31 December 2016. Such a resubmission is optional. Firms that take up the option will need to provide relevant data on a Solvency I basis to the FCA by 28 February 2017.

Response

This consultation closed on Wednesday 9 November 2016. Please address any comments or enquiries to CP30_16@bankofengland.co.uk.

Consultation Paper

PRA fees and FSCS levies for insurers: proposals for a transitional approach in 2017/18 – CP30/16

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