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0 Comments | Herald, The; Glasgow (UK), Mar 10, 2010

THE City watchdog yester-day doubled its original estimate for the cost to insurers of compensating people who are mis-sold controversial payment protection insurance (PPI).

The Financial Services Authority said it was now expecting firms to have to handle around 450,000 complaints about the cover each year going forward, rather than the 158,000 it had originally estimated.

The inflated number is expected to push up the cost of settling future mis-selling claims to as much as pound(s)203m a year.

On top of this, banks and insurers are expected to have to pay out up to pound(s)2.7bn to compensate people previously mis-sold one of the policies.