IIB slams FSCS levy hike

The proposed hike in brokers’ payments to the Financial Services Compensation Scheme threatens the viability of the UK’s small intermediary sector, the Institute of Independent Brokers has warned.

The IIB has criticised the scale of its proposed increases being demanded by the FSCS.

The levy is set to shoot up from £8m this year to £50.5m in 2010/11 with an additional £20m on top in the form of an interim charge for 2009/10.

The increases are largely designed to pay for compensation to customers who have been mis-sold personal protection insurance policies.

The IIB’s response says: “The prospect of innocent insurance brokers (mainly small firms) having to pay compensation levies totalling over £70m during 2010 threatens the viability of the UK independent sector.”

“We are seeking further details as to the basis for these figures but realise that the compensation levies are not subject to consultation. In our view, there is a lack of transparency as regards FSCS funding in general.

IIB chief executive Barbara Bradshaw said: “Although this may seem like yet another chapter in a long-running saga, it is crucial the broker trade associations and insurance brokers themselves keep up the pressure on the FSA.”