Consultation on General Insurance Mediation Business and Money Service Business fees 2023
Consultation on General Insurance Mediation Business and Money Service Business fees 2023We invite comments on this consultation via Jersey Finance Limited (JFL) or directly to our Finance team. If you require any assistance, clarification or wish to discuss any aspect of the proposals prior to formulating a response, it is of course appropriate to contact us.
Comments should reach JFL by 14 December 2022 and should be sent to:
Lisa Springate
Jersey Finance Limited
4th Floor
Sir Walter Raleigh House
48-50 Esplanade
St Helier
Jersey
JE2 3QB
Direct Line: +44 (0) 1534 836029
Office Line: +44 (0) 1534 836000
Email: lisa.springate@jerseyfinance.je
Alternatively, responses may be sent directly to our Finance team at the Jersey Financial Services Commission (JFSC) by 14 December 2022.
JFSC Finance team
Jersey Financial Services Commission
PO Box 267
14-18 Castle Street
St Helier
Jersey
JE4 8TP
Telephone: +44 (0) 1534 822000
Email: fscaccountsteam@jerseyfsc.org
Our policy is to provide the content of responses for inspection unless specifically requested otherwise.
JFL’s policy (unless otherwise requested or agreed) to collate all responses and share them verbatim with us on an anonymised basis (with reference made only to the type of respondent, e.g. individual, law firm, trust company etc.) This collated, anonymised response will, typically, be placed in JFL’s permanent electronic archive which is currently open to all JFL members.
Glossary of terms
|
Commission/JFSC |
Jersey Financial Services Commission |
|
Commission Law |
Financial Services Commission (Jersey) Law 1998, as amended |
|
FSJL |
Financial Services (Jersey) Law 1998, as amended |
|
GIMB |
General Insurance Mediation Business |
|
MSB |
Money Service Business |
1 Consultation
1.1.1 We are issuing this consultation paper in accordance with Article 8(3) of the Commission Law, under which the JFSC “may, in connection with the carrying out of its functions […] consult and seek the advice of such persons or bodies whether inside or outside Jersey as it considers appropriate”.
1.1.2 In addition, Article 15(3) of the Commission Law, requires that before the JFSC introduce and publish any fee
“[The JFSC] must first publish a report that must include:
(a) details of the duty or power for or in respect of which the fee is to be determined;
(b) details of the proposed fee;
(ba)details of the extent (if any) to which any penalties received have reduced the level of fee that would otherwise have been proposed;
(c) a request for comments on the level of the proposed fee; and
(d) a date, that is at least 28 days after the publication of the report, before which those comments may be made to the Commission”.
1.1.3 Article 15(4) of the Commission Law provides that should the JFSC and a representative body be unable to agree a fee that we must request the Bailiff to appoint three Jurats to consider if the fee proposed is unreasonable.
1.1.4 The JFSC considers the Representative Bodies for the GIMB and MSB sectors to be those listed at Appendix A; that each of the proposals within this consultation is reasonable; and that this consultation constitutes such a report as required by the Commission Law.
1.2 Who will be affected by the proposed changes?
1.2.1 The amendments to fees will affect all persons registered under the Financial Services (Jersey) Law 1998 (FSJL) to conduct general insurance mediation business (GIMB) and/or money service business (MSB) and persons that are issued with a registration certificate for such business on or after 1 January 2023.
1.3 Responding to the consultation
1.3.1 We invite comments from interested parties on the content of this consultation, which should be received by either JFL or the JFSC no later than 14 December 2022.
1.4.1 Following this consultation, we will publish feedback. The final fees notice will take effect on or before 1 January. Fees will be administered via businesses’ myJFSC accounts. Businesses will receive an email prompt to notify them that an invoice is awaiting payment.
2 The JFSC
2.1.1 We are a statutory body corporate established under the Commission Law. We are responsible for the supervision and development of financial services provided in or from within Jersey.
2.1.2 Article 15(2) of the Commission Law provides that fees set by us are to be retained and must, together with any other income:
2.1.2.1 Raise sufficient income to meet our liabilities;
2.1.2.2 Cover our expenses; and
2.1.2.3 Provide a reserve for such amount we consider as necessary.
2.2.1 Article 5 of the Commission Law prescribes that we are responsible for:
2.2.1.1 The supervision and development of financial services provided in or from within Jersey
2.2.1.2 Providing the Government of Jersey, any Minister for External Relations and Financial Services or any other public body with reports, advice, assistance, and information in relation to any matter connected with financial services
2.2.1.3 Preparing and submitting to the Minister for External Relations and Financial Services recommendations for the introduction, amendment or replacement of legislation appertaining to financial services, companies, and other forms of business structure
2.2.1.4 Such functions in relation to financial services or such incidental or ancillary matters:
As are required or authorised by or under any enactment, or
As the Government of Jersey may, by Regulations, transfer; and
2.2.1.5 Such other functions as are conferred on the JFSC by any other Law or enactment.
2.3.1 Article 7 of the Commission Law provides that in exercising our functions we may take into account any appropriate matter, but that we will have particular regard to:
2.3.1.1 The reduction of the risk to the public of financial loss due to dishonesty, incompetence, or malpractice by, or the financial unsoundness of, persons carrying on the business of financial services in or from within Jersey
2.3.1.2 The protection and enhancement of the reputation and integrity of Jersey in commercial and financial matters
2.3.1.3 The best economic interests of Jersey; and
2.3.1.4 The need to counter financial crime in both Jersey and elsewhere.
3 Proposals
3.1.1 In order for us to obtain sufficient funding to carry out our supervisory objectives and to ensure our ongoing financial resilience, we need to raise approximately £195k in fees from the GIMB sector and approximately £32k from the MSB sector.
3.2.1 The Commission Law contemplates increases to fees in line with RPI, which was recorded as 10.4% in September 2022. Although the cost of regulation continues to rise well in excess of this metric, our ongoing focus on cost control means that the inflationary component of the proposed fee increase can be limited to this amount.
3.2.2 An additional fee rate increase of 5% is dedicated to the stabilisation of our Financial Resilience as detailed in the Business plan and Financial Resilience Review published earlier this year.
3.2.3 The combined effect of the above is that we propose a fee rate increase of 15.4%, comprising:
3.2.3.1 Jersey RPI of 10.4%; and
3.2.3.2 A contribution towards our financial resilience objectives of 5%.
3.2.4 No Civil Financial Penalties have been received that will reduce the fees payable by GIMBs or MSBs during 2021.
3.2.5 Draft fees notices reflecting the proposals can be found in Appendix B.
3.2.6 Question: Do you agree with the proposed fee increase of 15.4%?
3.3 Supervisory effort and cost reduction
3.3.1 We are closely monitoring and managing our costs and have carefully managed costs for our MSBs and GIMBs sector supervision activities in recent years.
3.3.2 In line with the JFSC’s assessment of risk, MSBs and GIMBs generally receive pooled supervision, being subject to regular, yet less intense engagement than other regulated sectors. This is reflected in the generally lower quantum of GIMB and MSB fees by comparison to other regulated businesses.
3.3.3 Nevertheless, as the JFSC have focused efforts on financial crime supervision the volume of GIMB and MSB supervisory activity has increased.
3.3.4 The agile deployment of pooled teams has assisted us in managing costs but coupled with the significant fluctuation in efforts by Policy and Enforcement teams between sectors on a year-on-year basis prevents accurate assessment of sector-by-sector costs.
Appendix A - list of representative bodies who have been sent this consultation paper
Chartered Insurance Institute, Jersey branch
Jersey Finance
Jersey International Insurance Association
Appendix B – Draft GIMB fees notice
Notice of Fees
Published in accordance with:Article 15 of the Financial Services Commission (Jersey) Law 1998, as amended
Payable by or in relation to:General Insurance Mediation Business
Pursuant to:Articles 8(3) and 9(6) of the Financial Services (Jersey) Law 1998, as amended; and
Article 15(6) of the Financial Services Commission (Jersey) Law 1998, as amended
Commencement date:The fees set out in this notice and the attached schedule are effective for the period from 1 January – 31 December 2023
1.1 In this notice, unless the context otherwise requires –
|
Brokerage income |
means: (a) in relation to a registered person who carries on general insurance mediation business activities from within Jersey, means the net retained brokerage and other income arising from such activities whether the brokerage or income arises within or outside Jersey; and (b) in relation to a registered person who carries on general insurance mediation business activities in Jersey from outside Jersey, means the net retained brokerage and other income arising from such activities in Jersey by the registered person; |
|
JFSC |
means the Jersey Financial Services Commission; |
|
Law |
means the Financial Services (Jersey) Law 1998, as amended; |
2.1 For the purposes of Article 8(3)(c) of the Law (which Article allows fees that are to accompany applications for registration to be published), the fee specified in an entry in column 3 of Schedule 1 is prescribed in respect of applications for registration in relation to the class of general insurance mediation business specified in the entry opposite in column 2 of the Schedule.
3.1 For the purposes of Article 9(6) of the Law (which Article allows fees payable by registered persons to be published):
(a) a person within class S of Table 1, Schedule 2, shall pay for each year of registration (other than the year in which the person is first so registered) the annual fee set out opposite that class in column 4 of Table 1, Schedule 2; and
(b) a person:
(i) who is within class P, Q or R of Table 1, Schedule 2; and
(ii) whose brokerage income for the accounting year that ended in the year before the registration year for which the fee is payable is within a range specified opposite that class in column 3 of Table 1, Schedule 2,
shall pay, for each year of registration (other than the year in which the person is first so registered) the annual fee set out in column 4 of Table 1, Schedule 2.
(c) a person:
(i) who is within class P, Q, R or S specified in Schedule 1, as determined in accordance with column 2 of that Schedule, and
(ii) who is within the description of general insurance mediation business in column 1 of Table 2, Schedule 2,
shall pay for each year of registration (other than the year in which the person is first so registered) the annual fee set out in column 2 of Table 2, Schedule 2.
4 Late payment of fees and/or late submission of fees information
4.1 The due date for the JFSC to receive the annual fee is 29 February.
4.2 If the annual fee is not received by the JFSC by the due date, an additional late payment fee of 5% of the unpaid principal amount will be applied on the day after the due date, and on the 1st day of each calendar month after that.
4.3 If the firm does not supply the required information to calculate its registration fee by the due date, an administration fee of £200 will be charged the day after the due date, and on the 1st day of each calendar month after that while the information is still outstanding. This is in addition to the late payment fee set out in paragraph 4.2 which will be calculated once the information has been submitted.
5.1 If a registered person fails to file or deliver any document, including in respect of supervisory risk data, to the JFSC under the provisions of the Law or under any provisions of any Order issued in accordance with the Law on or before the date that the document becomes due, the registered person shall be liable to pay a fee of £100 for each complete month or part thereof that the document remains un-filed or undelivered unless the registered person has given the JFSC prior written notice of the reasons for the late filing or delivery of a document and the JFSC has agreed in writing that the filing may be late. Any such later agreed date shall become the due date for the purposes of the calculation and the payment of late filing fees.
Schedule 1: Prescribed classes and application fees
|
Column 1 |
Column 2 |
Column 3 |
|
Class reference |
Description of class of business |
Application fee |
|
P |
Carrying on general insurance mediation business (other than incidental general insurance mediation business), not carrying on any other class of financial service business and not being a business that is within Class Q. |
£8,300 |
|
Q |
Carrying on general insurance mediation business (including incidental general insurance mediation business): (a) in addition to carrying on: (i) any class of financial service business other than general insurance mediation business; or (ii) any other business authorized under the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1988 or the Insurance Business (Jersey) Law 1996; or (b) as a company that is part of a group, where another part of the group carries on: (i) any class of financial service business other than general insurance mediation business; or (ii) any other business authorized under the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1988 or the Insurance Business (Jersey) Law 1996. |
£4,150 |
|
R |
Carrying on incidental general insurance mediation business, if: (a) the business includes the giving of advice on the terms, conditions or suitability of the policy being proposed; and (b) the business to which the general insurance mediation business is incidental: (i) is not within a class of financial service business, and (ii) is not business authorized under the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1988 or the Insurance Business (Jersey) Law 1996. |
£4,150 |
|
Column 1 |
Column 2 |
Column 3 |
|
Class reference |
Description of class of business |
Application fee |
|
S |
Carrying on incidental general insurance mediation business, if: (a) the business does not include the giving of advice on the terms, conditions or suitability of the policy being proposed; and (b) the business to which the general insurance mediation business is incidental: (i) is not within a class of financial service business, and (ii) is not business authorized under the Banking Business (Jersey) Law 1991, the Collective Investment Funds (Jersey) Law 1988 or the Insurance Business (Jersey) Law 1996. |
£140 |
Schedule 2: Annual Fees (Table 1)
|
Column 1 |
Column 2 |
|
Column 3 |
|
Class |
Description |
|
Annual fee |
|
P |
A person who is within Class P as determined in accordance with Schedule 1 and who is not a person within Table 2. |
(a) £0 to £49,999,999 |
£2,550 |
|
(b) £50,000 to £99,999 |
£4,195 |
||
|
(c) £100,000 to £499,999 |
£5,600 |
||
|
(d) £500,000 to £999,999 |
£7,000 |
||
|
(e) £1,000,000 to £2,499,999 |
£8,400 |
||
|
(f) £2,500,000 to £4,999,999 |
£11,200 |
||
|
(g) £5,000,000 or more |
£14,000 |
||
|
Q |
A person who is within Class Q as determined in accordance with Schedule 1 and who is not a person within Table 2. |
(a) £0 to £49,999 |
£1,270 |
|
(b) £50,000 to £99,999 |
£2,125 |
||
|
(c) £100,000 to £499,999 |
£2,805 |
||
|
(d) £500,000 to £999,999 |
£3,525 |
||
|
(e) £1,000,000 to £2,499,999 |
£4,195 |
||
|
(f) £2,500,000 to £4,999,999 |
£5,600 |
||
|
(g) £5,000,000 or more |
£7,000 |
||
|
R |
A person who is within Class R as determined in accordance with Schedule 1 and who is not a person within Table 2. |
(a) £0 to £49,999 |
£665 |
|
(b) £50,000 to £99,999 |
£1,090 |
||
|
(c) £100,000 to £499,999 |
£1,400 |
||
|
(d) £500,000 to £999,999 |
£1,770 |
||
|
(e) £1,000,000 to £2,499,999 |
£2,125 |
||
|
(f) £2,500,000 to £4,999,999 |
£2,800 |
||
|
(g) £5,000,000 or more |
£3,525 |
||
|
S |
A person who is within Class S as determined in accordance with Schedule 1 and who is not a person within Table 2. |
£85 |
Schedule 2: Annual Fees (Table 2)
|
Column 1 |
Column 2 |
|
Description |
Annual Fee |
|
A person who: (a) has a place of business in Jersey from which the person carries on general insurance mediation business in or from within Jersey; or (b) is a company incorporated in Jersey, and who: (c) is within Class P, Q, R or S as determined in accordance with Schedule 1, and (d) is exempted, under an Order made under Article 17 (see (i) below) or Article 20 (see (ii) below) of the Law in relation to general insurance mediation business, from the application of that Order (see (iii) below). |
£85 |
(i) Where Article 17 of the Law relates to the Financial Services (General Insurance Mediation Business (Accounts, Audits, Reports and Solvency)) (Jersey) Order 2005.
(ii) Where Article 20 of the Law relates to the Financial Services (General Insurance Mediation Business (Client Assets)) (Jersey) Order 2005.
(iii) Where an exemption under one or other of the General Insurance Mediation Business Orders has been granted by the Commission on the basis that the registered person is an appropriately regulated person in respect of general insurance mediation business in accordance with the criteria set out under:
1. Article 21(3) of the Financial Services (General Insurance Mediation Business (Accounts, Audits, Reports and Solvency)) (Jersey) Order 2005; and/or
2. Article 20(3) of the Financial Services (General Insurance Mediation Business (Client Assets)) (Jersey) Order 2005.
Appendix C – Draft MSB fees notice
Notice of Fees
Published in accordance with:Article 15 of the Financial Services Commission (Jersey) Law 1998, as amended
Payable by or in relation to:Money Service Business
Pursuant to:Articles 8(3) and 9(6) of the Financial Services (Jersey) Law 1998, as amended; and
Article 15(6) of the Financial Services Commission (Jersey) Law 1998, as amended
Commencement date:The fees set out in this notice and the attached schedule are effective for the period from 1 January – 31 December 2023
1.1 In this notice, unless the context otherwise requires –
|
JFSC |
means the Jersey Financial Services Commission; |
|
Law |
means the Financial Services (Jersey) Law 1998, as amended; |
2.1 The fee to accompany an application for registration to carry on money service business shall be £3,590.
3.1 A person registered to carry on money service business at any point during the calendar year shall pay a fee of £3,590.
4.1 The due date for the JFSC to receive the annual fee is: 29 February, if the firm is already registered on 1 January; and otherwise on registration.
4.2 If the annual fee is not received by the JFSC by the due date, an additional late payment fee of 5% of the unpaid principal amount will be applied on the day after the due date, and on the 1st day of each calendar month after that.
5.1 If a registered person fails to file or deliver any document, including in respect of supervisory risk data, to the JFSC under the provisions of the Law or under any provisions of any Order issued in accordance with the Law on or before the date that the document becomes due, the registered person shall be liable to pay a fee of £100 for each complete month or part thereof that the document remains un-filed or undelivered unless the registered person has given the JFSC prior written notice of the reasons for the late filing or delivery of a document and the JFSC has agreed in writing that the filing may be late. Any such later agreed date shall become the due date for the purposes of the calculation and the payment of late filing fees.