Statement on refunds of surplus funds to members (or former members) of a levy payer class

Purpose

The purpose of this statement is to set out the basis under which FSCS will proceed to consider and effect any refund of a forecast surplus as at year end to members or former members of a levy payer class (‘surplus’).  It does not apply to the deposit taker class. 

Statement of Intent

  • FSCS will make a refund where the surplus is greater than £20 million and give consideration to the refund of a surplus where that amount may be in excess of £10 million.
  • Where the surplus accrues to a class whose levy in the year was raised on the “36 month model”, the surplus will be refunded, less the amount of the allowance in that levy for compensation costs not otherwise forecast, adjusted for the expiry of time in the year on a pro rata basis.
  • For a surplus which accrues to a class whose levy was calculated on the ’12 month model’, the surplus will be refunded less an allowance for compensation costs not forecast at the date of the refund, such allowance to amount to 20% of the total compensation costs for the year forecast as at the date of the refund, adjusted for the expiry of time in the year on a pro rata basis.
  • The refund of a surplus will be to current members of the levy paying class, in the respective shares of levy payers’ liabilities as at the date of the refund.
  • For a class for which no levy has been raised, the surplus will be refunded in full, with no retention.
  • FSCS will affect the refund in such manner as it sees fit at the time, and deduct any costs from the amount to be refunded.
  • This policy is capable of exception where FSCS does not consider it would be reasonable in the particular circumstances of any case. 

The FCA

The Financial Conduct Authority website includes a searchable database of all firms authorised and regulated by the FCA and the Prudential Regulation Authority (PRA).

The FOS

The Financial Ombudsman Service is the official independent expert in settling complaints between consumers and financial businesses