The Financial Conduct Authority may require insurers writing riskier policies to pay more into its Financial Services Compensation Scheme . Britain’s markets watchdog flagged a shift on Monday towards a “polluter pays” model of compensation by forcing insurers to pay more into a pot for consumers out of pocket. Firms currently pay into the scheme based on their size , not on the risk their products pose , with much of the recent stress to the industry caused by the life insurance sector . The scheme serves as a fund of last resort to the financial services industry . “ This proposal makes general insurance providers potentially liable for more of the compensation bill than before , ” the FCA said . It is also proposed to make companies scrutinise more closely those who sell their products .
The Financial Conduct Authority may require insurers writing riskier policies to pay more into its Financial Services Compensation Scheme . Firms currently pay into the scheme based on their size , not on the risk their products pose , with much of the recent stress to the industry caused by the life insurance sector . The scheme serves as a fund of last resort to the financial services industry . “ This proposal makes general insurance providers potentially liable for more of the compensation bill than before , ” the FCA said . It is also proposed to make companies scrutinise more closely those who sell their products .