Funeral plan regulation update - Thistle Initiatives

Written by Thistle Initiatives - Compliance consultancy | Aug 22, 2021 11:00:00 PM

What has happened?

The FCA published on its website more information for funeral plan (FP) providers and intermediaries since we issued our first blog post on the regulation of the pre-paid funeral plan sector, available here. Also, in its Handbook Notice 90, published on 23^rd July 2021, it confirmed, with some minor changes, the fee arrangements as originally proposed for funeral plan firms and applicable with effect from 1^st September 2021.

What do you need to do?

This additional information, available here, includes more detail on how the FCA plans to regulate firms, how to apply for authorisation and appointing or becoming appointed representatives or introducer appointed representatives. There are new pages specifically for providers and intermediaries.

The FCA published proposals on the fees it will charge funeral plan firms in its consultation (CP 21/8) on FCA regulated fees. Handbook Notice 90 largely confirmed these proposals and clarified that the fee structure will be as follows;

Standard charges for authorisation:

1. Intermediaries (i.e. firms carrying out FP distribution): £2,500
2. Administrators (i.e. providers restricted to carrying out FP contracts, but not to enter into contracts) – £2,500,
3. Providers (i.e. these both carry out and enter into FP contracts): £10,000

An uplift of these charges by 40%, to £3,500 and £14,000, respectively for firms that apply for authorisation late. The enhanced charges would apply to firms that are trading when the gateway opens on 1 September 2021 and which submit their applications after 1 November 2021. New applicants would not be affected.
Concerning variations of permission (VoP) applications, an intermediary or administrator applying for the full FP provider permission would pay £5,000, while an intermediary applying to be an administrator would pay £1,250. Other FP VoPs would pay the standard charge of £500.
Concerning fees, FP firms with incomes up to £100,000 will pay only a minimum fee in fee-block A.0, which is currently set at £1,151. Larger firms will pay a variable rate fee on their incomes above £100,000, on top of the minimum charge and an uplift in fee-block AP.0 (currently £0.1055) to contribute towards their prudential regulation.
There will be an annual charge of £250 on each appointed representative for which a principal firm is responsible. The FCA has decided to proceed with the charge for 2021/22, although with a lower rate of £75 for introducer ARs. It will consult in its fees policy CP in October or November 2021 whether to extend this charge to FP firms when they start paying fees from 2022/23.

How can we help you?

If you’d like to know more about how we can help you with your funeral plan regulation arrangements, or any other regulatory compliance issues, our expert team is here to help.

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