IIB: 'PPI ruling a kick in the teeth for brokers'

Institute of Insurance Brokers chief executive Barbara Bradshaw warned that the High Court ruling against banks could lead to higher FCSC levy fees for brokers.

The banks lost a judicial review fighting against the FSA’s mandate for them to review old PPI complaints from 2010 and prior years.

The ruling means IFAs and mortgage brokers will also have to spend time and money reviewing old cases and pay out potential compensation – something which could force them into insolvency.

The unpaid compensation payments would then fall on the shoulders of the Financial Services Compensation Services (FSCS), which would almost certainly hike the levy on brokers to pay for the costs. Compensation costs for PPI are anywhere between £2.5bn and £4bn.

Bradshaw said: “It could have a far reaching effect, and could cascade out.

“It seems like a kick in the teeth for brokers again.”

Head of technical services Anne Peel said the decision could lead to higher levies, although at least brokers are by now aware of the FSCS costs.

Peel also said it was unfair on brokers, adding: “I do not know of any insurance brokers who have sold PPI.”