The British Insurance Brokers Association (BIBA) addresses the significant increases in the Financial Services Compensation Scheme (FSCS) levy.
How does the FSCS set its levy? The FSCS is designed to compensate customers in the event of the failure of their financial services provider/intermediary. The FSCS comprises of five separate ‘pots' of compensation, or classes as the FSA refer to them. Insurance is one class and this is divided into two sub-classes - insurers in one and ‘intermediaries' in the other. The insurance intermediary sub-class has suffered from a number of firms that have mis-sold PPI (payment protection insurance) being forced to close because they cannot afford to pay compensation to affected customer...
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