Close menu

Application provision

1.1 This Part applies to the FSCS, and for the purposes of chapter 21, 22.6 - 22.8 and Annex 2, this Part also applies to participant firms and the Society.



The FSCS must administer the policyholder protection scheme in accordance with the rules in this Part, the FSCS Management Expenses Levy Limit and Base Costs Part, the Management Expenses in Respect of Relevant Scheme Part, and any other Part of the PRA Rulebook prescribed by law to ensure that the policyholder protection scheme is administered in a manner that is procedurally fair and in accordance with the European Convention on Human Rights.



The FSCS must publish information for claimants and potential claimants on the operation of the policyholder protection scheme.



The FSCS may agree to pay the reasonable costs of an eligible claimant bringing or continuing insolvency proceedings against a relevant person (whether those proceedings began before or after a determination of default), if the FSCS is satisfied that those proceedings would help it to discharge its functions under the requirements of this Part.



The FSCS must have regard to the need to use its resources in the most efficient and economic way in carrying out its functions under the requirements of this Part.



The FSCS must take appropriate steps to ensure that potential claimants are informed of how they can make a claim for compensation as soon as possible after a determination has been made that a relevant person (or where applicable, a successor) is in default, whether by the FSCS or the PRA.



The FSCS must put in place and publish procedures which satisfy the minimum requirements of procedural fairness and comply with the European Convention on Humans Rights for the handling of any complaints of maladministration relating to any aspect of the operation of the policyholder protection scheme.



Notwithstanding anything to the contrary in this Part in relation to the Society, members and Lloyd's policies, the FSCS must act, so far as is reasonably practicable, to ensure that:

  1. (1) eligible claimants have protection under this Part in relation to Lloyd's policies equivalent to that otherwise afforded to eligible claimants by the FSCS;
  2. (2) the FSCS does not meet claims in relation to Lloyd's policies unless the Central Fund is unlikely to be able to meet them;
  3. (3) claims against members under the policyholder protection scheme which arise from the same loss under the same Lloyd's policy must be treated as a single claim; and
  4. (4) any recovery resulting from the exercise of any subrogation or assignment of rights to the FSCS, is treated by the FSCS in accordance with 14.1 – 14.6, and any such recovery which is not paid to the claimant in accordance with those rules, is used for the benefit of FSCS in priority to any interest that the Society may have.



For the purposes of sections 219(1A)(b) and (d) of FSMA (Scheme manager's power to require information), whether a relevant person (or where applicable, a successor) is unable or likely to be unable to satisfy claims, shall be determined by reference to whether:

  1. (1) the relevant person (or where applicable, the successor) is in default;
  2. (2) the FSCS has secured, or is attempting to secure, continuity of contracts of long-term insurance for policyholders of the relevant person in accordance with 4.1;
  3. (3) the FSCS has made, or is considering making, a payment to policyholders of the relevant person in accordance with 4.3; or
  4. (4) the FSCS has taken, or is considering taking, measures for the purposes of safeguarding the rights of policyholders of the relevant person in accordance with 5.1.