UK brokers have welcomed the Financial Services Authority’s (FSA) decision to reopen the review of its compensation scheme.

The review was suspended in 2009 as a result of UK regulatory reform and European Union directives on the financial services industry.

The UK Treasury has now published its proposals on the future structure, rule making arrangements and accountability of the compensation scheme.

The British Insurance Brokers’ Association (BIBA) and the Institute of Insurance Brokers (IIB) have both welcomed the decision to restart the review.

BIBA CEO Eric Galbraith says the unfairness of the Financial Services Compensation Scheme (FSCS) has been of great concern to the association.

“We are being unfairly penalised by rapidly increasing levies for the mistakes of the credit sector, insurers and the regulator,” he said. “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 secondly, we want an end to cross-subsidies.”

IIB CEO Barbara Bradshaw also says brokers are paying for the mistakes “of other people outside of the sector. All we want is to have apples in the same barrel – not apples and pears.”

The restarted FSCS funding model review will look at issues such as the composition of the nine funding classes, the levy thresholds applicable to each and their tariff bases.