The Financial Conduct Authority (FCA) has revised down its fee rate for advisers operating in the health and protection insurance markets for this financial year.
However, the rate of £1.727 per £1,000 of annual income over £100,000 is still an increase of 2% compared to the £1.693 charged in 2022/23.
In April the regulator originally forecast that advisers in the A.19 block for general insurance distribution, which includes those selling health and protection policies, would have a fee rate of £1.811.
Firms in the A.19 category are still being expected to contribute £34.7m to the FCA’s annual funding requirement (AFR) – an increase of more than 10% compared to the overall rise of 8.1%.
This has been partly offset by firms in this sector reporting rising incomes.
“The AFR in A.19 has increased by 2.3% above the overall FCA AFR because this fee-block does not benefit from the claims management companies (CMC) or cryptoassets rebates as it has not previously contributed to these costs,” the FCA said in its PS23/10.
“However, although the AFR has increased by 10.4%, this increase has been partly offset by the value of annual income increasing by 7.4%, resulting in just a 2% increase in the rate.”