# = pounds sterling
HM Treasury News Release
46/99
9 March 1999
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REVISED INSURANCE FEES ANNOUNCED
Regulations setting out the fees that insurance companies and
Lloyd's will pay from 1 April
1999 were announced today by the Treasury.
The fees are charged to recover costs incurred by the Treasury in
carrying out certain statutory
supervision functions, or by the Financial Services Authority (FSA) under the terms of an
agreement made with the Treasury.
The level of fees is fixed according to the amount of gross
premium income receivable by an
insurance company in a financial year. No fees will be collected from UK branches of
companies
(other than pure re-insurance companies) based in the European Economic Area which are
supervised in their home state.
It is estimated that the total amount to be raised in fees in 1999-2000 will be œ12,200,000.
The current 1998-1999 tariff has been changed so as to distribute
more evenly the burden of fees
across all the companies which have a potential liability to pay fees, and to take account
of
changes in the approach to supervision and to recover the costs of anticipated increases
in
regulatory activity, as described in the published Plan and Budget 1999-2000 of the
Financial
Services Authority.
NOTES TO EDITORS
1. The Insurance (Fees) Regulations (SI No 589/1999) are made
under powers given to the
Treasury in the Insurance (Fees) Act 1985 which amended the Insurance Companies Act
1982. The 1999-2000 regulations replace the Insurance (Fees) Regulations 1998.
2. Insurance company fees are set to recover the full costs of the
Treasury's statutory
functions, specified in Regulation 10, essentially statutory supervision and proposals for
United Kingdom and European legislation.
3. There are about 840 insurance companies authorised to carry on
business in the United
Kingdom but not all these are authorised by the Treasury, some being authorised by
another EEA member state. Treasury authorises an estimated 750, some of which are no
longer underwriting new business.
4. The revised tariff of fees is as follows:
Gross premium Fee
Up to œ500,000 œ300
Over œ500,000 up to and including œ2,000,000 œ1,000
Over œ 2,000,000 up to an including œ5,000,000 œ6,500
Over œ5,000,000 up to and including œ20,000,000 œ16,000
Over œ20,000,000 up to and including œ75,000,000 œ27,500
Over œ75,000,000 œ40,000
The largest groups of insurance companies (those including seven
or more companies)
will pay a maximum fee of œ280,000. The Council of Lloyd's will pay a fee of
œ200,000.
5. Insurance companies in the process of winding up, and those
whose authorisation to
effect new business has been withdrawn are not required to pay a fee.
6. Insurance companies authorised by the Treasury are required to
deposit certain specified
documents, generally at annual intervals, under Section 22 (1) of the Insurance
Companies Act 1982. The Council of Lloyd's is required to deposit a statement annually
under Section 86(1) of the 1982 Act. Fees are payable when such documents are
deposited.
7. The Plan and Budget of the Financial Services Authority for
1999-2000 was published
in February 1999. Copies can be obtained from the Authority at 25, The North
Colonnade, Canary Wharf, London E14 5HS. Tel: +44(0) 171 676 1000; Fax +44 (0) 171
676 1099. Website: ww.fsa.gov.uk
8. If you have access to the internet, you can find this news
release and other Treasury
material at www.hm-treasury.gov.uk