Small Insurance Brokers such as you might still find on your local high street are under further threat as the banks and building societies collapse the Institute of Insurance Brokers has warned.
The Association of British Insurers is reported to be furious with the way that the nationalisation of the Bradford & Bingley debt has been handled which has left UK Insurance Companies having to foot the bill of £14 billion to cover any losses under the FSA controlled Financial Services Compensation Scheme (FSCS).
If the FSCS has to pay out more than 1.84 billion per year then insurance brokers and intermediaries will be asked to contribute more to the fund, to which they already pay a substantial amount each year in order to trade. This could well lead to more small insurance businesses going under – especially as we have not yet seen the last of the big fallers in the Global finance world.
This weekend the Belgium Government was trying to sort out another rescue package for troubled insurance company Fortis who have already received an 11.2 billion input from the Benelux governments. Fortis incidentally had a large affinity scheme with Bradford and Bingley. Two other companies heavily involved with B&B were Zurich and Norwich Union.