UK brokers have been hit with an additional £16 million ($23.28 million) bill for the Financial Services Compensation Scheme (FSCS).

The 2012/13 interim levy on the scheme’s general insurance intermediation funding class is prompted by the high cost and volume of payment protection insurance (PPI) claims. 

But the PPI scandal followed mis-selling by credit brokers, not insurance intermediaries.

The levy “reinforces our view that the funding model treats the professional insurance broker unfairly and we are continuing to pursue this matter as a major lobbying issue”, incoming British Insurance Brokers’ Association (BIBA) CEO Steve White says. 

BIBA wants insurance brokers to be split from other intermediaries in a separate funding class.

“We still maintain this alternative is a more prudent and equitable solution for a sector that makes a direct and indirect contribution to UK GDP of 1%,” Mr White said. 

“This contribution should entitle professional insurance brokers to a more tailored response from the regulator.”

BIBA warns the PPI claims crisis is far from over, with the UK Financial Ombudsman Service indicating it continues to face an unprecedented number of cases, which then take time to filter through to the FSCS.