The Financial Conduct Authority (FCA) has set out its proposals for charging regulatory fees to claims management companies (CMCs).
Responsibility for claims management regulation will pass from the Claims Management Regulator to the FCA on 1 April 2019.
In two consultations launched this week, the FCA proposes charging CMCs fees to cover the costs of FCA regulation and the Financial Ombudsman Service. Responses are due by 22 October 2018.
However, Andy Kay, director of operations at CMC First4Lawyers, said: ‘We have already voiced concerns about the FCA’s “one size fits all” approach to regulating CMCs.
‘This is yet another example of the government not listening to reason and getting it wrong again, and calls into question why they are introducing FCA regulation so late in the day. By their own statement they recognise that the vast majority of CMCs will likely exit the market during 2019 at which point it will be left to those that remain to foot the bill for a regulatory service that was more appropriate to the Payment Protection Insurance market than the personal injury market.’
Kay said the insurance sector promote and manage claims services but wouldn’t face the same regulation. He called for general insurers, specifically motor insurers, to face the same regulatory burden and be required to obtain separate authorisation to carry out CMC activities.
