The Financial Services Compensation Scheme (FSCS) has announced that a levy of £150m (0.66% of leviable income) will be raised against general insurance firms.
The levy will be used to pay compensation for general insurance claims, including those against Independent Insurance and Chester Street.
FSCS chief executive Suzanne McCarthy said: "One of our main aims is to make sure that consumers receive compensation promptly, when they need it. This levy will ensure that the necessary funds are available.
"This levy should come as no surprise to the insurance sector. The Policyholders Protection Board (PPB) had intended to raise a levy to cover these costs, but found that they did not have the legal powers to raise a levy for compensation costs incurred after N2.
"We expect that the majority of insurance companies will already have put funds aside to cover this."
News of the levy follows reports that the FSCS has now paid almost £17m in compensation to former policyholders of collapsed insurer Independent Insurance.
The FCSC said £16.59m had been paid to 652 former Independent policyholders suffering hardship because of unpaid claims.
This is a sharp increase from the £2.3m paid out by mid-September.
Independent, which collapsed in June, had 500,000 individual policyholders and insured 40,000 businesses.
FSCS is the UK's single safety net for customers of financial services firms that have gone out of business.
The scheme took over responsibility for paying compensation from 1 December 2001, the date when the Financial Services & Markets Act came into force (N2), replacing existing compensation schemes including the Policyholders Protection Scheme.
FSCS covers insurance, deposits and investments, and is funded by the financial services industry.
