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Higher watchdog fees for professional negligence checks

Published on 16 Feb 2010 under category: legal

Levies on insurance and mortgage firms are set to increase after the industry watchdog announced that it would step up its supervisory activities this year to prevent instances of corporate fraud and professional negligence.

The Financial Services Industry (FSA) will now charge its members a minimum £1,000 flat rate which will be higher depending on the size of the company and the amount of monitoring required by the body.

A nine per cent increase in funding is needed, from £413.8 million to £454.7 million, in order to support a recruitment drive and more "intensive supervision".

The FSA's new agenda follows criticism that the body did not do enough to scrutinise the activities of mortgage and insurance firms in the run up to the banking crisis.

Hector Sants, FSA chief executive, said: "The way the FSA regulates has changed radically, both in approach and intensity over the last three years. We recognise that any increase in the industry's costs is unwelcome at a time when margins are under pressure in some segments of the industry.

"However, the overall increases are necessary to deliver our new intensive supervisory approach. The new fee structure will ensure that the costs are fairly distributed and the increased investment is paid for by those firms who will be subject to the increased scrutiny."

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