Daily Insurance Industry News
Daily Insurance Industry News
Tuesday 21st of May 2019
March 30, 2010

PPI claims prompt £61m FSCS 2010/11 levy

by Gill Montia

Story link: PPI claims prompt £61m FSCS 2010/11 levy

The Financial Services Compensation Scheme (FSCS) has decided against applying an interim levy on insurance intermediaries in 2009/10, for the costs of payment protection insurance (PPI) claims.

However, the body says these costs will be levied in 2010/11, adding that PPI claims are becoming a growing area of its work and will be one of the main drivers of costs in 2010/11.

The FSCS has set the 2010/11 general levy at £148 million, with over £61 million of this going to firms in the General Insurance Intermediation sub-class, mainly to cover the costs of PPI claims.

For the Investment Intermediation sub-class, the levy is £24 million, for the estimated costs of known defaults for 2010/11.

Together with investment and PPI claims, the other main area of claims costs for 2010/11 is general insurance and the General Insurance Provision sub-class will pay a levy of more than £41 million for 2010/11, mainly to cover the ongoing claims costs from the Builders Accident Insurance Limited, Chester Street, Drake Insurance Plc, and Independent Insurance estates.

FSCS interim chief executive Alex Kuczynski says: “The costs of PPI, investment and insurance claims are among the main drivers of FSCS costs this year and into 2010/11.”

He adds: “Our duty is to help consumers … who are entitled to our protection. This is good for consumer confidence and benefits the industry.”


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