The Association of Medical Insurance Intermediaries (AMII) has branded the proposed 57% increase in 2011's Financial Services Compensation Scheme (FSCS) levy as "unfair, excessive and totally inappropriate."
AMII claimed the substantial rises in regulatory costs over the last two years could cause some intermediaries to leave this market altogether.
The trade body added the FSA should review the funding of the FSCS now and not leave it for another year, as has been suggested, because the financial damage to smaller intermediaries could have a serious impact on growth and jobs.
Andrew Tripp, Chairman of AMII said: "This increase is on top of a massive eight-fold increase last year and is mainly a result of compensation payments for PPI (payment protection insurance) misselling.
"As almost all AMII members never sold any of these policies, it is unfair that they are footing the bill on an equal basis. This huge increase has come out of the blue totally and will have a serious impact on many intermediaries."
