The IIB will proceed with its test case against the Financial Services Compensation Scheme (FSCS), which is "not satisfied" about the eligibility for compensation of brokers who accept payment by credit card.
The issue arises from the collapse of Independent Insurance. Policyholders who paid by credit card were advised by the FSCS to reclaim the money from the card issuer, which in turn sought the money from the brokers. Brokers were later advised that they would not be able to pursue either Independent or the FSCS to recover the debt.
IIB director-general Andrew Paddick said if the FSCS found against the broker in its test case, the IIB "would have to look at legal remedies".