The Institute of Insurance Brokers (IIB) will continue to challenge the FSA over brokers' exposure to unlimited liability under the Financial Services Compensation Scheme (FSCS).

IIB director general Andrew Paddick made the statement after FSA chairman Callum McCarthy refused to reconsider the rule, which Paddick said exposed brokers to unlimited individual FSCS claims arising from insurance mediation activities.

But before taking the matter up with the Treasury or considering a judicial review, Paddick needs to demonstrate that the IIB has first pursued all relevant questions with the FSA.

As such he has written to McCarthy asking why the FSA has gone beyond EU regulations in extending its compensation scheme to brokers.

He also asked on which feedback from CP174 the FSA based its decision.