Financial Services Compensation Scheme (FSCS)—the qualifying conditions for compensation
Produced in partnership with Honor Levy, non-practising solicitor
Financial Services Compensation Scheme (FSCS)—the qualifying conditions for compensation

The following Financial Services guidance note Produced in partnership with Honor Levy, non-practising solicitor provides comprehensive and up to date legal information covering:

  • Financial Services Compensation Scheme (FSCS)—the qualifying conditions for compensation
  • Compensation paid to eligible claimants
  • Compensation paid to firms on behalf of customers: non-investment insurance distribution
  • Compensation relating to failure of insurance firms
  • Definition of eligible claimant under COMP
  • Exceptions: circumstances where a person coming within COMP 4.2.2 may receive compensation
  • Eligible claimants: deposits
  • Eligible claimants: dormant accounts
  • Eligible claimants: protected contracts of insurance
  • Protected claims
  • more

This Practice Note covers the conditions necessary for the payment of compensation to a person by the Financial Services Compensation Scheme (FSCS).

This covers rules relating to:

  1. who may claim compensation

  2. from whom they can claim, and

  3. what they can claim for

There are different regimes under the FSCS compensation scheme system for deposit claims, non-deposit claims and insurance policyholder protection. The Prudential Regulation Authority (PRA) is the relevant authority for rules relating to claims concerning deposits, dormant accounts and insurance provision, whereas the Financial Conduct Authority (FCA) is responsible for all other types of financial activity covered by the FSCS.

The relevant corresponding rules are found in the COMP sourcebook of the FCA Handbook and in the Depositor Protection, Policyholder Protection and Dormant Account Scheme parts of the PRA Rulebook.

Compensation paid to eligible claimants

Claims under COMP

In relation to those claims coming within the ambit of the FCA, compensation may be paid out by the FSCS to an eligible claimant (subject to COMP 11 (Payment of compensation)) if the FSCS is satisfied that:

  1. an eligible claimant has made an application for compensation (and note COMP 3.2.1A, which states that the FSCS may treat persons who are or may be entitled to claim compensation as if they had done so)

  2. the claim is in respect of a protected claim against a