UK compo body weighed down by hefty costs
UK brokers threatening to refuse to pay levies for a national compensation scheme won’t be happy to hear the scheme paid more than £204 million ($349 million) to 21,000 claimants last year, and is likely to pay more in the current year.
The Financial Services Compensation Scheme (FSCS) released its annual report and accounts last week. They show the UK remains in the grip of a payment protection insurance (PPI) mis-selling scandal.
PPI is not normally sold by general insurance brokers, but two-thirds of the compensation paid last year was for PPI and investment claims.
British general insurance brokers must pay the increased fees because they occupy the same “sub-class” as other general insurance intermediaries – including loan companies that sell PPI alongside personal loans.
The brokers have threatened to respond to a sharp rise in regulator-imposed levies with an industry-wide boycott.
Institute of Insurance Brokers CEO Barbara Bradshaw says some UK brokers are facing an 800% increase in levy fees.
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