Explanatory note

These Regulations amend the Compensation (Claims Management Services) Regulations 2006 (S.I. 2006/3322) (“the 2006 Regulations”). Regulation 2(4) amends regulation 14 of the 2006 Regulations to provide that in certain circumstances an authorised person (i.e. a person authorised by the Regulator under the Compensation Act 2006 (c. 29) to provide regulated claims management services) may not surrender the authorised person’s authorisation without the consent of the Regulator.

Regulation 2(6) inserts a new Part 11 into the 2006 Regulations to make provision for the Regulator to impose financial penalties on authorised persons. New regulation 48 provides the circumstances in which a penalty may be imposed.

The amount of the penalty must be determined in accordance with new regulations 49 and 50. New regulation 49(2) sets maximum amounts for a penalty. Before imposing a penalty the Regulator must give written notice to an authorised person in accordance with new regulation 51(1).

New regulation 52 requires the Regulator to give an authorised person a notice setting out the penalty being imposed. Under new regulation 53 the Regulator may enforce any unpaid penalty as a debt. Under new regulation 54 income from penalties is to be paid by the Regulator into the Consolidated Fund after deduction of the Regulator’s costs in collecting or enforcing penalties.

Regulation 3 provides that the requirement for the Regulator’s consent to surrender of authorisation and the new powers to impose financial penalties do not apply to acts or omissions that take place before the dates the regulations relating to those matters respectively come into force.

An impact assessment has not been prepared for this instrument as it has only a minimal impact on business and civil society organisations. It has a negligible impact on the public sector.