Fund for customers of collapsed insurers reveals levy hike for GI distribution 

The collapses of unrated insurers continues to plague insurance, with the compensation fund for customers of failed carriers revealing its latest costs. 

The collapse of unrated insurers Qudos and Lamp cost £12.4m so far in compensation claims, according to the Financial Services Compensation Scheme (FSCS).

The FSCS budget also revealed an £11m increase in GI distribution levy to £23 for the 2020/21 year ahead. 

The FSCS said: ”During 2019/20 we have seen a slight increase in compensation within the General Insurance class (+£12.7m).

”The recent failures of Qudos Insurance (December 2018) and Lamp Insurance Co. Ltd (May 2019) have cost £12.4m.

”Chester Street Insurance Holdings Ltd, Enterprise Insurance Co. Plc, Gable Insurance AG and Alpha Insurance A/S continue to be the largest failures within this class making up 73% of payments.

“We are not forecasting any payments for Life Insurance Provision.”

It emerged yesterday that Gefion, an unrated Danish carrier, has ‘serious liquidity problems’.