IIB calls on FSA to address key issues

The Institute of Insurance Brokers (IIB) has called upon the FSA to properly address a number of serious issues concerning the Compensation Scheme and Ombudsman Service limits.

The IIB said the FSA needed to tackle the issues rather than just consulting on possibly ‘tweaking' the limits.

IIB director general, Andrew Paddick said that an IFA or insurance broker could be faced with having to pay an award of £100,000 (which the FOS would like increasing to £200,000), for which he may not have been held legally liable at law and he has no right of appeal.

Paddick said: “This is not justice. Everyone in the EU is supposed to be entitled to a fair trial and right of appeal. Instead, the FSA board has bowed to consumer group pressure and completely ‘fudged' the most fundamental human rights issue at stake”.

On the subject of the Financial Services Compensation Scheme (FSCS), the IIB said it still has enormous concerns, that general insurance intermediaries are the risk carriers of unlimited individual awards arising from the activities of advising upon/arranging contracts of insurance, as opposed to operating an insurance company, which is a different matter altogether.

This, the IIB says is totally disproportionate to other FSCS limits, such as the bank deposits limit of £31,700 and investments limit of £48,000.

Paddick said: “The FSA board needs to urgently revisit the financial exposures it has imposed upon the general insurance intermediaries before something serious happens, not afterwards when it will be too late”.