Enough is enough: the already exorbitant FSCS levy leaped 50% this week
General insurance intermediaries can’t take any more. As they stagger under the growing burden of regulatory fees, some have already started to talk of job cuts. Unless the FSA takes action to sort out this mess, some brokers will find their very businesses on the line.
The greatest madness of it all is that brokers are paying through the nose for others’ mistakes. The FSCS levy is spiralling because of financial awards made to the victims of credit brokers mis-selling PPI. The vast majority of general insurance brokers who are picking up the tab – or rather, sinking under it – have never touched PPI.
Even the FSA has made a lacklustre acknowledgement of the unfairness of this ludicrous situation, promising to review the structure of the FSCS by April 2012. But we’ve been waiting for a consultation document since the end of last year, and time is running out.
It is imperative that the FSA publishes its consultation as soon as possible, to give general insurance brokers time to present their overwhelming evidence that this system is broken. It won’t be easy, but together we can come up with a fairer solution, if given the opportunity. We have outlined our aims in the Fair Fees campaign – see page 10 – and we will continue to highlight this all-important issue in the coming weeks and months.
This doesn’t just affect the small brokers who could go bust. Big brokers will find themselves paying eye-watering fees, and they shouldn’t be afraid to speak out. We would also urge insurers to show their support for their broker partners and get behind the campaign. Sign our petition now at www.insurancetimes.co.uk/backfairfees, or email your story to: firstname.lastname@example.org.