Financial Services Compensation Scheme hits brokers with £61m fee, but not interim levy
The Financial Services Compensation Scheme has blamed rocketing PPI claims for its hefty £61m levy on brokers for 2010/2011.
Brokers will have to cough up £11m more than initial estimates, however, in one spot of bright news, there will be no interim levy for 2009/2010.
Insurers will have to fork out £41.5m to the fund, an increase of £7m on the first draft. The FSCS said the extra millions would mop up oustanding claims from failed insurers Independent, the Builders Accident Insurance Limited, Chester Street Insurance and Drake Insurance.
The total levy across the financial services industry was £148m.
BIBA chief executive Eric Galbraith said: "Whilst we welcome the fact that brokers will no longer be called upon to pay an interim levy this spring, the increased burden of £61.4m on brokers for 2010/11, once again highlights the urgent need for the compensation funding model to be addressed.”
Alex Kuczynski, interim Chief Executive, says: “The costs of PPI, investment and insurance claims are among the main drivers of FSCS costs this year and into 2010/11. After further refining our assumptions, we have set the levy for the coming year at £148m. Our duty is to help consumers of authorised financial services firms who are entitled to our protection. This is good for consumer confidence and benefits the industry.”
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