Biba approves renewal of FSCS funding review

clock • 1 min read

The British Insurance Brokers' Association (Biba) has welcomed the FSA's decision to restart its funding review of the Financial Services Compensation Scheme (FSCS).

It gave the regulator its full backing and hopes it will eventually lead to a change in the current "unfairness" in funding for the scheme.

Biba has led an extended campaign to get the current situation reviewed which included submitting a 7,000 name petition to Parliament and demanding for the process to be accelerated to make adjustments before 2012's fee requirements.

Eric Galbraith, CEO of Biba, said: "The unfairness inherent in the current FSCS funding model is a major cause of concern to me and our members.

"We are being unfairly penalised by rapidly increasing levies for the mistakes of the credit sector, insurers and the regulator. This funding review gives the FSA the chance to reconsider our two principal concerns with the current funding model.

"Firstly, we want separation in the insurance intermediary sub-class for the professional insurance brokers and are in discussions with our lawyers and consultants on how this might best be achieved.

"Secondly, we want an end to cross subsidies - the UK is the only state in the EU where insurance intermediaries are exposed to potential losses elsewhere in the financial services sector, putting our members at a commercial disadvantage compared to their European peers," he added.

The body has pledged to "engage positively in the consultation process to ensure a more equitable funding mechanism."

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