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Last resort scheme sets total for first industry levy 

The Compensation Scheme of Last Resort board says major insurers and banking groups will pay $241 million under its first levy, as it outlines estimated funding for the program. 

The board say the announcement is a “milestone” towards supporting complainants who are owed compensation from Australian Financial Complaints Authority determinations but have yet to be reimbursed due to financial firm insolvency. 

Compensation for eligible recipients will be limited to $150,000 per claim, with the initial fund targeted towards complaints from between November 2018 and September 2022.  

The figure was developed with actuarial consultancy Finity. Consultant Taylor Fry also contributed, reviewing Finity’s analysis.  

Legislation establishing the scheme last June allows Federal Parliament to review the estimated fund, after which the Australian Securities and Investments Commission will collect the establishing levy from the 10 largest banking and insurance groups, per 2021-22 taxation records.  

The scheme is due to start its operations in April.