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Ami hails ‘much needed’ FSCS reform plans

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The Association of Mortgage Intermediaries has hailed the FCA’s plans to change FSCS levies to be fairer to mortgage intermediaries.

The regulator today published a consultation paper suggesting mortgage lenders should pick up 25 per cent of claims made against brokers in default.

The mortgage broker trade body says the proposals are fairer to brokers than the current system.

An Ami statement says: “Ami has also strongly supported the inclusion of provider contributions to the intermediary classes, which we believe mistakenly disappeared from the FSCS structure at the time the FSA split in 2013.

“Its reintroduction will only accurately reflect the existing regulatory landscape and will hopefully focus all minds more clearly on their respective responsibilities and accountability.”

The regulator also wants to change the FSCS funding system to move brokers handling pure protection insurance from the life and pensions group to the general insurance class.

This would mean they no longer pay extra levies to handle claims against self-invested personal pensions.

The Ami statement says: “With the majority of claims in the life and pensions intermediation class relating to mis-sold SIPPs, it is grossly unfair that mortgage firms as the primary writers of life insurance have been paying a disproportionate amount of investment advisers’ invoices despite no connection between the two business lines.”

Ami chief executive Robert Sinclair says: “We have been tirelessly lobbying several issues with the FSCS structure and we are pleased that the significant work we have carried out with the FCA over the last year is materialising.

“The fact that the FCA has decided to re-consult with industry rather than proceeding with one of the proposals set out in the last paper is encouraging. They have not only listened to our concerns but are openly engaging with industry to ensure that they implement the fairest solution.”

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