Britain’s Financial Services Authority will spend more than $64 million over the next year to regulate the country’s life and general insurance industries. The FSA has been ordered to take over the regulatory role from the self-regulating General Insurance Standards Council.

FSA chairman Howard Davies has imposed an $8.3 million levy on the industry to pay for an “ongoing overhaul of insurance regulation and [to] enhance the regular supervision of insurance companies”. While he did not elaborate on what measures the FSA has in mind, the collapse during the past year of several insurers – most notably Independent Insurance – is understood have spooked the Government.

The industry’s failure rate is certainly in Mr Davies’ sights. He told a conference in London last week that the FSA’s new role will enable it to judge what prudential measures are required and lessen the chance of more collapses.

And echoing his Australian counterpart in APRA, Jeff Carmichael, Mr Davies said that any rules which would completely eliminate the chance of an insurer collapse “would damage the industry”.