The British Insurance Brokers' Association (BIBA) has hit out at the industry's regulators for imposing what it calls ‘disproportionate' fee hikes and one-off levies on its members.
It believes intermediaries are being unnecessarily and excessively targeted compared to their European counterparts.
Proposals for the FSA's regulatory fees and levies for 2010/11, published last week, suggest the minimum fees for firms in the A19 general insurance mediation fee-block will rise from £450 to £1,000 in 2010/11, an increase of more than 122%.
In 2009/10, the number of general insurance mediation firms who only paid minimum fees was 3,099, or 34% of the total in the A19 block.
BIBA chief executive Eric Galbraith says: "The overall cost of regulation is totally disproportionate in relation to the low risk posed by our members' regulated activities.
"BIBA is still seeking far greater transparency around 'value for money' from the regulator, and the proposal to increase the minimum fee is overwhelmingly rejected on the basis the FSA's fees and levies are vastly more than they should be for regulating general insurance brokers, particularly when compared to the rest of the EU."
Galbraith also expressed his displeasure at the FSCS's plan and budget for next year, which includes a possible interim levy of £20m from general insurance brokers to support failures involving the sale of payment protection insurance (PPI), and a further £42m hike to £50.5m for next year.
"We understand the interim levy is likely to be called for this spring to pay for company failures for those involved in the PPI market, and this is particularly galling for general insurance brokers and intermediaries who collectively have little penetration in the PPI sector," he says.
"Insurance intermediaries in the UK are subject to a degree of cross-subsidising of compensation that is totally unique in Europe.
"The FSA are commencing a fundamental review of the FSCS and BIBA will be actively involved to try and establish a fairer method of funding for its members."
