Cost structure
For levying purposes our cost structure comprises:
Management expenses
These are FSCS' overheads, split between base costs and specific costs.
- All firms contribute to the base costs - the costs of running the Scheme which are not dependent on levels of activity - in proportion to the annual fees they pay to the FSA.
- Specific costs are the costs of assessing claims and making payments. These are allocated to relevant classes and sub-classes.
The management expenses levy is subject to an annual limit, fixed by the FSA following consultation with the industry. All firms contribute to the base costs element of the management expenses levy.
Compensation payments
These are payments made to or on behalf of claimants and are allocated to the relevant funding sub-class. Firms in each class or sub-class contribute to the related compensation costs, in line with their FSA tariff data.This means that levies are only raised in the first instance against firms that are authorised to carry out the same type of business that has given rise to compensation claims.
