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PPI drives insurance broker FSCS levies to £58m

Money

Mortgage brokers will not have to pay a Financial Services Compensation Scheme annual levy for 2013/14 or an interim levy for 2012/13.

The FSCS’s plan and budget for 2013/14, published last week, reveals the home finance intermediation class paid an annual levy of £4.5m for 2012/13. The FSCS says the expected increase in claims volumes for mortgage brokers did not materialise in 2012/13 so it has reduced its claims assumptions for next year.

General insurance brokers are set to bear the £58m cost of stubbornly high numbers of claims relating to missold payment protection insurance for 2013/14.

Firms within the general insurance intermediation class are facing a 61 per cent increase in their levy due to continued PPI claims.

GI brokers paid a total of £36m for their annual levy in 2012/13, and also face a £20m interim levy for 2012/13.

The FSCS’s claims estimates for PPI for 2012/13 have fallen slightly from 19,782 in February 2012 to 19,046. Last September, the FSA estimated PPI claims would fall 29 per cent to 13,575 for 2013/14, but is now more pessimistic and expects the number of PPI claims to drop by just 16 per cent to around 16,000.

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