Brokers face a levy of £1.7m to cover the operation of the Financial Services Compensation Scheme (FSCS).

But the FSA has yet to determine how much each company will have to pay.

The FSCS published last week its proposed levy on the general insurance industry to cover the running costs of the FSCS, called the management expense levy.

It predicted a levy for 2005/06 of £95m on insurers - £40m less than the previous year - and £1.7m on brokers. But the FSCS did not reveal how the levy would be recouped from brokers.

Biba regulation and compliance manager Steve White said: "The FSCS levy is calculated using the annual income figure submitted as part of brokers' application for authorisation, unless brokers have disclosed an 'eligible income'."

The levy will be announced in March, when the FSA has totalled the 'eligible income' figures declared.

Brokers have until 28 February to register their eligible income - the total of commissions, fees and charges retained in respect of retail customers and commercial customers with a turnover of under £1m.