Insurance intermediaries need to be prepared for a significant increase in regulatory costs this year (2021/22) as Financial Services Compensation Scheme (FSCS) compensation levy forecasts reach unprecedented levels. Firms could be faced with an 8-fold increase on the FSCS element of last year’s invoices for their contribution to the ‘retail pool’. This is to cover the compensation costs relating to the failures in the Life Distribution and Investment Intermediation (LDII) Class. The current levy forecast for the General Insurance Distribution Class is £146m. Although this figure has yet to be confirmed, insurance intermediaries need to be prepared for a significant hit.