Could a redrawing of the Financial Services Compensation Scheme boundaries save brokers from a repeat of the adverse financial impact of the payment protection insurance mis-selling scandal?
It is said that time heals all wounds, but an insurance broker only has to look at the effects of the payment protection insurance mis-selling scandal to quash that cliché.
It's been more than six years since the issue came to light and, despite the fact that they are not largely responsible for PPI mis-selling, insurance brokers continue to be burdened by the mistakes of other financial sector intermediaries.
Total PPI refunds have now topped £4bn and the Financial Ombudsman Service receives up to 1000 PPI-related complaints a day. And it's showing no sign of abating.
Rising demand
In response to demand, the FOS has already recruited 600 additional staff this year, bringing the total to 2000, with plans to employ a further 500 before the end of 2012.
Furthermore, in April it introduced a £350 supplementary case fee for businesses for each PPI mis-selling case referred to the service, chargeable to businesses involved in more than 25 PPI cases a year.
The Financial Services Compensation Scheme has also made changes to cope with the rising number of complaints. In2010/2011 it increased levies on businesses in the general insurance intermediation subclass by £52.9m, bringing the total to £61.4m.
Read more: http://www.postonline.co.uk/post/feature/2192541/payment-protection-insurance-ringing-the-changes#ixzz22m1L8JJ2
