The recent invoices received by members from the FSA for the 2010-11 fees and levies have highlighted the inequality of the current funding of the FSCS.
Eric Galbraith, BIBA Chief Executive, said “BIBA has been inundated with calls from members who are incensed and ready for a fight. The increase in the FSCS levy on intermediaries is totally unjustified. It is not the failure of insurance brokers that is causing this massive increase in the cost of regulation”
Galbraith continues “The fault actually lies with the failure of firms who’s core business is not insurance intermediation and with the FSA who have consistently failed to adequately police the sale of this product. The cost of the mis-selling of PPI is that Insurance Brokers are facing 48 fold increases in there FSCS fees from 2 years ago, this proves the structure of the compensation scheme is totally flawed”.
“It gets worse”, stated Galbraith. “Just wait until the banking failures have been assessed because the current compensation fund has a cross-subsidy with banks. Unless we can change the structure of the FSCS many brokers will struggle to survive!”
BIBA can advise members on how best to minimise the levy applying to brokers and has published a new helpful regulatory briefing for members containing this advice which is attached. “We are part of the FSA group reviewing the FSCS and will lobby strongly for this inequality to end”, stated Steve White.
