BIBA welcomes postponed contribution to FSCS pool

The British Insurance Brokers’ Association has welcomed publication of the latest levy requirements from the Financial Services Compensation Scheme, which will see its members no longer being asked to provide a significant contribution to the retail pool for the 2021/22 financial year.

Firms in the General Insurance Distribution funding class are the biggest contributors to the retail pool, when another FSCS funding class exceeds the limit that may be collected from them.

The 2022/23 financial year could be worse than predicted for 2021/22, however, with a number of anticipated collapses happening a year later than thought. The levy for 2021/22 had been £833m, whilst the first prediction for 2022/23 is £900m.

BIBA’s head of compliance, David Sparkes said: “The change in FSCS levy for 2021/22 will help firms in the insurance broking sector, which like all industries in general, is getting back on its feet, following the challenges brought on by the pandemic. The 2021/22 contribution should now be in the region of 17.5% of the contribution they would have been asked to pay, had a call been made on the retail pool this year.

“The extent of the contribution to compensation payments has been a bone of contention for BIBA members, who have been asked to pay for the failures of firms with whom they share no affinity, for many years now. We are pleased with today’s outcome but will continue to lobby on behalf of members for fairness in the funding arrangements overall.”

The final levy for 2022/23 will not be known until the early half of 2022.

    Share Story:

Recent Stories

Cyber physical risks
Property damage as a consequence of cyber attack is often excluded from standard property policies, but as the industrial internet of things expands, so too do the risks. This podcast examines the evolving threat landscape. Published October 2021

Financial institutions were early adopters of cyber security and insurance. Are they still on top of the game?
Managing huge amounts of sensitive data online makes financial institutions a prime target for hackers. As such, the sector was an early cohort for insurers in creating cyber cover. Since then, the market has evolved almost beyond recognition. It continues to challenge itself to this day, complying with rigorous regulatory demands and implementing avant-garde enhancements to keep abreast of the ever-changing risks. Published June 2021