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SUP 16 Annex 45B Guidance notes for completion of the Annual Claims Management Report form

SUP 16 Annex 45BGG

1Guidance for CMC001

General notes

This data item collects key information annually from firms with permission to undertake regulated claims management activity.

Except for rows 13 to 15, 19 to 27 and 30 to 34, the data provided in this form should relate only to regulated claims management activity, even if the firm undertakes regulated or unregulated activities in other areas. Except where a single Annual Claims Management Report is submitted in respect of a group in accordance with SUP 16.25.8R, the data should not include the assets, liabilities, income or costs of any consolidated subsidiaries of the firm.

If you have undertaken no regulated claims management activity during the reporting period, answer “yes” to question 3 “do you wish to report a nil return?” to attest that there is no activity to report to us.

All questions requiring a monetary answer must be answered in sterling only. Figures should be reported in integers (that is, single units, to the nearest whole number), except where otherwise specified in the form: for example, income figures should be given to the nearest pound, not to the nearest thousand pounds.

In the form there are two sections. The first section must be answered by all firms (including those that only have permission for seeking out, referrals and identification of claims or potential claims, or agreeing to carry on a regulated activity in respect of one of these activities). The second section however (from question 35 onwards) is only required from those firms that have permission for one or more of the following activities:

  1. advice, investigation or representation in relation to a personal injury claim;

  2. advice, investigation or representation in relation to a financial services or financial product claim;

  3. advice, investigation or representation in relation to a housing disrepair claim;

  4. advice, investigation or representation in relation to a claim for a specified benefit;

  5. advice, investigation or representation in relation to a criminal injury claim; and

  6. advice, investigation or representation in relation to an employment-related claim,

collectively referred to in these guidance notes as ‘advising on a claim, investigating a claim, or representing a claimant’.

Data elements

Question

Notes

3

Do you wish to report a nil return?

If the firm has undertaken no regulated claims management activity during this reporting period then answer “yes” and submit the form.

4

Over of the reporting period, how many employees did the firm have on average?

State how many employees the firm had on average during the reporting period.

Include part time workers in this figure as 0.5.

5

How many employees left the firm (for any reason) during the reporting period?

State the figure for the number of employees who left the firm.

Include part time workers in this figure as 0.5.

6

What was the firm’s annual employee turnover rate during the reporting period?

This should be the number of employees who left the firm during the reporting period (item 5) divided by the average number of employees the firm had during the reporting period (item 4), multiplied by 100.

7

What was the total remuneration paid to the firm’s employees over the reporting period?

Include all remuneration received by employees, including any variable remuneration such as bonuses, commissions or performance-based pay. Include share-based remuneration, options and the monetary value of benefits in kind.

8

What was the total amount of variable remuneration paid to the firm’s employees over the reporting period?

Include only variable remuneration such as bonuses, commissions or performance-based pay. Include share-based remuneration, options and the monetary value of benefits in kind to the extent that these are variable.

9

How does the firm charge fees to its customers?

Please describe all the ways in which the firm charges fees: for example, whether calculated by reference to the amount recovered for the customer or on an hourly rate, and whether fees are charged up front or on account, or are invoiced periodically or at the end of the claim.

10

What was the total annual income for all regulated claims management activities, as defined in FEES 4 Annex 11AR for the purposes of FCA fees reporting (see guidance in FEES 4 Annex 13G)?

Refer to the guidance contained in FEES 4 Annex 13G before completing this question. If you undertake other activities this will be a subset of your total income.

11

What was the firm’s income from seeking out, referrals and identification of claims or potential claims?

State the revenue from generating leads for, or selling leads to, third parties. If you do not have this permission enter “0”.

12

What was the firm’s income from all regulated claims management activities?

13

What was the firm’s income from all regulated activities?

14

What was the firm’s income from activities which are not regulated activities?

15

What was the firm’s total income, including from activities which are not regulated activities?

This should be the sum of items 13 and 14.

16

What was the firm’s expenditure in respect of all regulated claims management activities?

Include any share of overheads which is allocated to income from regulated claims management activities.

17

What was the firm’s expenditure in respect of all regulated claims management activities (excluding expenditure of the sort listed in CMCOB 7.2.8R(2)(b))?

18

What was the firm’s operating profit from regulated claims management activities?

Operating profit is equal to income (item 12) less expenditure (item 16).

Balance sheet

Questions 19 to 27 are to be answered as at the end of the relevant reporting period

19

What was the value of the firm’s total assets?

Include all fixed and current assets.

20

How much cash did the firm hold?

This should relate to the whole firm but should not include the cash of any consolidated subsidiaries. This should include cash held in a bank account available for instant withdrawal.

21

What was the value of the firm’s other current assets?

A current asset is an asset that is expected to be converted to cash within a year of the date of measurement (but does not include cash). This should relate to the whole firm (including investments in or receivables from other group entities) but should not include the assets of any consolidated subsidiaries.

22

How much did the firm owe in overdrafts and bank loans due within one year?

Include only the drawn amount of overdrafts.

23

What was the value of the firm’s current liabilities (other than overdrafts and bank loans)?

A current liability is a debt or obligation that falls due within one year of the date of the liability arising. This should relate to the whole firm (including any amounts owed to other group entities) but should not include any consolidated subsidiaries.

24

What was the value of the firm’s total (current and non-current) liabilities?

Non-current liabilities are those falling due more than one year after the date of measurement.

25

What was value of the firm’s current assets less the value of its current liabilities?

This should equal the sum of items 20 and 21 less the sum of items 22 and 23.

26

What was the value of the firm’s total assets less the value of its current liabilities?

This should equal the sum of item 19, less the sum of items 22 and 23.

27

What level of prudential resources did the firm hold at the end of the reporting period (as calculated in CMCOB 7.3)?

CMCOB 7.3 sets out how prudential resources are to be calculated and which forms of capital are eligible for inclusion.

28

Was the firm a Class 1 firm or a Class 2 firm (as defined in CMCOB 7.2.5R) at the end of the reporting period?

29

What was the firm’s overheads requirement (as calculated in CMCOB 7.2.8R) as at the end of the reporting period?

CMCOB 7.2.8R sets out how the overheads requirement is to be calculated.

30

As at the end of the reporting period, was the firm’s overheads requirement (as calculated in CMCOB 7.2.8R) greater than the amount set out in whichever of CMCOB 7.2.6R(1)(a) or 7.2.7R(1)(a) was applicable to the firm?

The sums applicable under CMCOB 7.2.6R and 7.2.7R are £10,000 for a Class 1 firm and £5,000 for a Class 2 firm.

31

Did the firm hold client money at any point during the reporting period?

Answer “yes” or “no”. For the purposes of this question, include client money which has been sent out by cheque and is uncleared and/or unbanked.

32

What was the firm’s prudential resources requirement (as calculated in CMCOB 7.2.6R and 7.2.7R) as at the end of the reporting period?

CMCOB 7.2.6R sets out how the prudential resources requirement is to be calculated for Class 1 firms. CMCOB 7.2.7R sets out how the prudential resources requirement is to be calculated for Class 2 firms.

33

Did the firm have a prudential surplus or deficit at the end of the reporting period?

A firm with prudential resources in excess of its prudential resources requirement has a prudential surplus. A firm with prudential resources less than its prudential resources requirement has a prudential deficit.

34

What was the amount of the prudential surplus or deficit at the end of the reporting period?

Enter positive figures only (irrespective of whether the amount was a surplus or deficit.)

The rest of the questions are only for firms that have permission for advising on a claim, investigating a claim, or representing a claimant.

All the questions below relate to advising on a claim, investigating a claim, or representing a claimant and should not include data for any other regulated claims management activity.

35

Does the firm have permission for advice, investigation or representation in relation to a personal injury claim?

Answer “yes” or “no”. Having these permissions in respect of personal injury claims triggers a requirement to hold professional indemnity insurance.

36

Did the firm have a professional indemnity insurance policy in place for advice, investigation or representation in relation to a personal injury claim at the end of the reporting period?

Answer “yes” or “no”.

If yes:

(a)

Who is the underwriter of the insurance?

State the underwriter’s name.

(b)

What is the policy renewal date?

Provide the end date of the policy in the format dd/mm/yyyy.

(c)

Have the minimum terms of the policy been reviewed in the last five years?

(d)

What is the amount of the limit of indemnity (liability) for any single claim?

If the policy applies different indemnity limits to different insured events, enter the lowest applicable limit.

(e)

What is the amount of the limit of indemnity (liability) for claims in the aggregate over the policy period?

(f)

What is the amount of the excess (or deductible) that would be applicable for any one claim?

(g)

Has the identity of the insurance provider or the terms and conditions of the insurance policy changed from the content of the last Annual Claims Management Report form submitted to the FCA?

Answer “yes” or “no”.

37

What was the highest balance of client money held by the firm at any point during the reporting period?

Report rounded to the nearest pound.

38

In relation to the balance reported for question 37, for how many different customers did the firm hold client money?

Report the number of customers to whom the balance reported for question 37 relates.

39

For how many different customers did the firm hold client money for a period longer than two business days?

Report the total number of customers for whom the firm held client money for longer than two business days.

40

For how many different customers did the firm hold client money for a period longer than five business days?

Report the total number of customers for whom the firm held client money for longer than five business days. Exclude (for question 40 reporting purposes only) any customers to which the firm has sent a cheque or other payable order which is uncleared and/or unbanked. For the avoidance of doubt, a firm must continue to treat this money as client money until the cheque or order is presented and paid by the bank.

41

What was the longest period of time for which the firm held client money for a customer?

Report in days.

42

What was the average fee charged by the firm, during the reporting period in respect of a claim?

Include in the average only claims where a fee was charged.

43

How many leads did the firm purchase from lead generators during the reporting period?

State “None” or provide a positive figure.

44

If you have provided a figure in response to the previous question, provide the following details in respect of the three lead generators from which the firm purchased the most leads during this reporting period:

Provide all the information requested in each column.

45

How many leads did the firm supply to a third party? (include all the occasions on which the firm passed a customer, or details of a customer or claim, to a third party)

46-51

How was the firm’s regulated claims management activity divided among the following areas of work?

Provide the following figures for each area of work.

For financial services and products claims and personal injury claims show how this work is split between different subcategories.

When reporting “other”, complete the free text box to indicate what the figures relate to.

Revenue

Enter the total income earned from this type of work during the reporting period.

Number of claims where lead obtained from lead generator

Enter the number of claims where the customer was obtained from a lead purchased from a lead generator.

Number of claims pursued

Enter the number of claims in respect of which an agreement was reached with the customer for the firm to investigate, advise or represent.

Number of successful claims

Enter the number of claims which resulted in a payment or other remedy for the customer. Include claims settled on such terms.

Number of claims halted or not taken forward because: no good arguable base, suspected fraud, or being frivolous or vexatious

Enter the number of claims which the firm declined, or declined to continue to pursue because there was no arguable case in the left hand column; the number of those where there was suspected fraud in the middle column; and the number of those which were frivolous or vexatious in the right hand column.

52

Of the above types of claim, which three saw the largest percentage change in number of successful claims?

Percentage change is the increase or decrease in the number of successful claims concluded during the reporting period compared to the number in the equivalent period ending 12 months earlier. Enter the name of the type of claim and the percentage change. For financial services or financial product claims and personal injury claims, enter the more detailed claim category (e.g. Whiplash).