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 .
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 scheme 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 intended to make insurers scrutinise more closely intermediaries who sell their products.