Prudential Regulation Authority Rulebook

7.1

Where it would be unduly burdensome to require (or retain) payment, or where this would not achieve the purpose for which the relevant rule was made, the PRA may waive, reduce the amount payable, or make a whole or partial refund of sums already paid. Any decision to waive a fee by the PRA will be undertaken under the powers set out by Section 138A of FSMA.

7.2

Submissions will be assessed on a case-by-case basis. Relief will be granted only for transactions for which the firm can demonstrate that the criteria in s138A FSMA are clearly met, taking account of the impact of both the unmodified rules on the firm’s fee, and of any waiver or modification on the fees of other firms.

7.3

A claim by a fee payer where the waiver application is based on that fee payer’s error should be made within two years of the beginning of the period to which the fee relates.

7.4

The PRA notes there is a risk that firms conducting a large ‘one-off’ reinsurance transaction could be subject to a very high, and potentially inequitable, periodic fee. Where an insurer believes this may be the case, it can apply for a waiver or modification under s138A FSMA. Such waivers or modifications should be submitted by the end of February before the start of the fee year to which the application relates.

7.5

Examples of reinsurance transactions that may be eligible for relief include:
• long-term reinsurance arrangements made on an ad hoc basis; and
• reinsurance conducted in advance of a Part VII transfer and similar in scope to the intended transfer.

7.6

These examples are illustrative only: all applications will be considered on their own merits, and the fact that an application comes within an example given in this paragraph does not guarantee that a waiver or modification will be granted in full or in part.

7.7

Any waiver or modification application made under s138A will need to be accompanied by a copy of all relevant reinsurance agreements.