The Policyholders' Protection Board (PPB) made total payments of £60.6m last year, with £33.3m paid to the policyholders of collapsed motor insurer Drake Insurance.

With new insolvencies since Drake – notably the collapse of Independent Insurance – the Board has stated in its newly-published annual report that a further levy will need to be raised "in the near future".

The report for the year to 31 March 2001 listed total professional and adminstrative costs of £1.4m. "This means for every pound paid in compensation, the administrative cost was only 2.3p," according to the report.

One commentator acidly noted that, by that reckoning, the PPB can claim efficiency improvements for each extra pound it pays out.

The new levy on the insurance industry "will be based on the leviable general insurance premium income for the 2000 calendar year."

The PPB also highlighted the results of its customer satisfaction survey which said most policyholders thought the PPB acted "promptly and in a fair and courteous way".