Britain’s new Financial Services Authority (FSA) is putting some big hurdles in the way of insurance brokers, with most small businesses given the same consumer protection status as private consumers. Now the FSA is understood to be about to propose a continuous broker solvency margin of 5% for money held in premiums.

Brokers’ groups are already considering the options. One revealed in the Insurance Times is a scheme to use premium funders to deal with the clients’ money enabling brokers to move away from a threatened raft of legislation intended to keep their funds under strict control. But London broking sources said premium funders would probably be reluctant to get involved, because such an arrangement may bring them under the new FSA legislative load as well.