It’s that time of year again when UK Insurance Brokers and Intermediaries are asked to pay their annual membership fees for the soon to be defunct, Financial Services Authority (The FSA).
Reading through the Insurance news this week you will find multiple stories from Brokers moaning about the ‘ridiculously’ high fees they are being asked for in order to trade. In some cases the fees have risen three fold on last years costs and many small operators are threatened with going out of business. In some cases the fees represent 20% of their income.
The reason, the FSA’s Financial Services Compensation Scheme to which all members have to contribute.
In the last couple of years the FSCS has paid out over a billion pounds in damages for claims to individuals who were mis-sold payment protection insurances (PPI), such as mortgage protection or loan protection primarily by – The Banks.
Yes those good old bastions of the British financial system, the Banks and not forgetting the Building Societies who were equally as guilty, had been systematically robbing their customers for years, who took out PPI on the back of their mortgages, loans and credit cards .
On average these institutions were charging in excess of five times the premium for the same cover that could be had from an independent supplier or Insurance Broker offering mortgage protection.
They got away with it for years because you and me the UK public were initially only too keen to sign their agreements to secure the loan!
When they finally got found out, thanks to the lobbying of Insurance Brokers, The FSA fined them all a pittance!
Now there’s a shortfall in the amount of cash needed to foot the bill, and guess who’s got to pay?
You got it – the very same Insurance Brokers who pointed out the misdeeds of the UK Banks and PPI in the first place.
How mad is that!
So what do the FSA do and what does the Insurance Broker get for his fees?
Well from our experience absolutely nothing, until today that is, when a letter came in the post advising us to ‘cold shoulder’ this investment company we’ve never heard of on penalty of being struck off the register……
Meanwhile the UK Government owned Lloyds TSB Group owners of Halifax and Bank of Scotland have announced today that they finally will not be pressurising their customers into buying their PPI products!
Insurance Blog is of the opinion that the sooner the FSA is removed and replaced by another bunch of bureaucratic pen pushers the better and worse for us all………..
This time please keep the Bankers out of Insurance!