PPI Claims Lead The Way
However, the FSCS is hopeful that PPI claims will increase drastically in the coming months and also roll over to 2011. This leads us to believe that more decisions will be issued by the Financial Services Compensation Scheme next year.
Chief Executive Loretta Minghella has maintained: “The FSCS will continue playing a valuable role in promoting consumer confidence in 2010/11 by paying compensation when firms fail. In the light of recent investment firm failures, we are expecting the costs of investment compensation to rise significantly over the coming months.”
“In addition, 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. Doing so helps to promote consumer confidence, which also benefits the industry.”
The FSCS is expected to review its claims and funding assumptions, while setting a date for the initial levy in March. Check out more here…