General insurance brokers could be hit with a £20m bill from the Financial Services Compensation Scheme (FSCS) and a further £40m hike next year as the fallout from payment protection insurance (PPI) continues.
The prospective one-off interim charge may be necessary to cover additional costs of meeting PPI claims for 2009/10.
In addition, the FSCS has also predicted a huge leap in levies for general insurance intermediaries in its 2010/11 budget.
Prior to this announcement, just £8.5m had been raised through brokers, but next year's estimate now stands at £50.5m.
The FSCS is taking this action due to the significant increase in the number of PPI cases it is dealing with, a figure it expects to double next year.
The news is better for advisers in the Life and Pensions sub-class, who look set to face reduced levies to £13.5m, down from £19m (-28.9%).
Loretta Minghella, Chief Executive of the FSCS, said: "The FSCS will continue playing a valuable role in promoting consumer confidence in 2010/11 by paying compensation when firms fail.
"PPI claims will be an important driver of our business next year and will contribute to significant costs estimated at £50.5m in the General Insurance Intermediation sub-class.
"Although the situation is fluid, our current assumption is that around 8,000 PPI claims will come in during the next year. That's almost double the number we expect this year.
"In such tough economic times, we recognise that the interim and annual levies will be unwelcome news for firms. We take great care in determining our indicative levies though our primary obligation is to deliver compensation to those entitled to our protection," she added.