How is FSCS funded?
The FSCS is funded by levies on firms regulated by the FSA. For levying purposes the FSCS business is split into contribution groups reflecting the different sub-schemes. • accepting deposits; • insurance business; • designated investments; • mortgage advice and arranging; and • general insurance mediation. For each sub-scheme there is one or more contribution groups, based on the ‘fee-blocks’ used by the FSA for allocating its own fees to regulated firms. Firms are allocated to a contribution group (or groups) according to their regulated permissions, i.e. the type of business they are authorised to transact. All firms contribute to the general running costs of the Scheme (the base costs element of our management expenses), in proportion to their FSA fees. Firms are levied for compensation costs by reference to tariffs set for the relevant contribution group. Levy invoices are issued and collected on our behalf by the FSA in a single invoice covering FSA, FOS (Financial Ombudsman Serv
The FSCS is funded by levies on firms regulated by the FSA. For levying purposes FSCS business is split into 5 broad classes: • life and pensions; • deposits; • investment; • general insurance; and • home finance. Firms are allocated to a sub-class according to their permissions, i.e. the regulated activities they are authorised to transact. All firms contribute to the general running costs of the Scheme (the base costs element of its management expenses), in proportion to their FSA fees. Firms are levied for compensation costs based on the tariff for their relevant contribution group. The FSA invoice and collect levies on behalf of the FSCS, which reduces administrative costs for fee payers. See further information on fee blocks and tariff data.
