COMP 10.1 Application and Purpose

Application

COMP 10.1.1 R 01/12/2001

This chapter applies to the FSCS.

COMP 10.1.2 G 01/12/2001

It is also relevant to claimants.

Purpose

COMP 10.1.3 G 01/12/2001

In most cases it is appropriate for there to be a limit on the amount of compensation payable by the FSCS and that there should be some part of the claim which is not compensatable and for which the claimant must bear the loss. The purpose of this chapter is to set these limits out.

COMP 10.2 Limits on compensation payable

COMP 10.2.1 R 01/12/2001

The limits on the maximum compensation sums payable by the FSCS for protected claims are set out in COMP 10.2.3 R.

COMP 10.2.2 G 01/10/2007

The limits apply to the aggregate amount of claims in respect of each category of protected claim that an eligible claimant has against the relevant person. Consequently, a claimant who has, for example, a claim against a relevant person in connection with protected investment business of £30,0006, and a further such claim of £20,0006 , will not receive 100% compensation for both claims 6; instead he will receive £48,0006 (100% of the first £30,0006 and 90% of the next £20,0006). Similarly, if a claimant receives more than one payment in respect of a claim 6 or claims 6 on one or more protected contract of insurance, the claimant will only receive 100% of the first £2,000 of the total paid, and not 100% of the first £2,000 of each payment.2

6 6 6 6 6 6 6 6 6

COMP 10.2.3 R 06/08/2009

Table Limits

This table belongs to COMP 10.2.1R

Type of claim	Level of cover	Maximum payment
Protected deposit or protected dormant account 14	100% of claim 6 6	£50,000 8 or 50,000 Euros whichever is the greater on the date the relevant person is determined to be in default or the date the protected deposit was due and payable, if later. [Note: article 7(1) of the Deposit Guarantee Directive] (see also below for building society and other mutual society mergers(COMP 10.2.10 R) and protected deposit transfers under the special resolution regime (COMP 10.2.11 R))13 6 8
Protected contract of insurance when the contract is a relevant general insurance contract	(1) Where the claim is in respect of a liability subject to compulsory insurance : 100% of claim	Unlimited
	(2) Where the claim arises under the Third Party (Rights against Insurers) Act 1930, is in respect of a liability within COMP 5.4.5R(1)(b), and is in connection with an Article 9 default: 90% of the . claim	Unlimited
	(3) In all other cases: 100% x first £2,000 90% of remainder of the claim.	Unlimited
Protected contract of insurance when the contract is a long-term insurance contract	100% x first £2,000 At least 90% of the remaining value of the policy as determined in accordance with COMP 12.	Unlimited 2
Protected investment business	100% x first £30,000 90% x next £20,000	£48,000
Protected home finance mediation 5 1 5	100% x first £30,000 1 90% x next £20,000 1	£48,000 1
Protected non-investment insurance mediation 3	(1) where the claim is in respect of a liability subject to compulsory insurance : 100% of claim 3	Unlimited 3
	(2) In all other cases: 100% x first £2000 90% of the remainder of the claim 3	Unlimited 3

COMP 10.2.4 G 01/12/2001

COMP 12 sets out the rules the FSCS will follow when calculating the amount of compensation payable.

COMP 10.2.5 G 01/11/2007

COMP 12.4.1 R and COMP 12.4.4 R include further limits relating to Deposit Guarantee Directive claims 7and ICD claims against certain incoming EEA firms. These reflect the Deposit Guarantee Directive 7 and Investor Compensation Directive/s,7 under which compensation may be payable by the incoming EEA firm's Home State compensation scheme.

7 7 7

Continuity of insurance cover

COMP 10.2.6 R 01/12/2003

[deleted]2

COMP 10.2.7 R 01/12/2003

[deleted]2

Claims arising under COMP 3.2.4 R4

COMP 10.2.9 R 14/01/2005

4If a firm has a claim under COMP 3.2.4 R, the FSCS must treat the share of the shortfall of each customer as if it were a protected claim for the purposes of calculating the limits of compensation payable, within COMP 10.2, in relation to that customer.

Building society and other mutual society mergers10

COMP 10.2.10 R 29/03/2009

(1)
9This rule applies from 1 December 2008 to 30 September 2009.
(2)
In the event of a merger between two building societies or a building society and the subsidiary of another mutual society (whether or not of the same type),10 there is a separate and additional £50,000 maximum payment limit for a claimant with respect to claims for protected deposits held under the name of the dissolved entity 10provided the following conditions are satisfied:
10
1. (a)
  the merger takes effect between 1 December 2008 and 30 September 2009;
2. (b)
  the successor entity 10has notified the FSA before the merger takes effect that it wishes this rule to apply;
  10
3. (c)
  before the merger took effect, the claimant had a protected deposit with each of the merging entities;10 and
  10
4. (d)
  the successor entity10 continues to operate the business of the dissolved entity10 under the name of the latter.
  10 10
[Note: The FSA will publish the names of any successor entity10 and the relevant name to which a separate £50,000 limit applies.]
10
(3)
A successor entity10 to which this rule applies must make and retain a written record of potential claimants for whom the separate limit applies.
10
(4)
In this rule "mutual society" and "subsidiary" have the same meanings as in the Building Societies (Funding) and Mutual Societies (Transfers) Act 2007.10 11

Protected deposit transfers under the special resolution regime

COMP 10.2.11 R 29/03/2009

(1)
11This rule applies from 16:00 on 29 March 2009 to 30 September 2009.
(2)
In the event of a transfer of protected deposits from one deposit-taking firm to another deposit-taking firm pursuant to the property transfer powers under the Banking Act 2009, there is a separate and additional £50,000 maximum payment limit for a claimant with respect to claims for protected deposits held under the name of the transferor provided the following conditions are satisfied:
1. (a)
  the transfer takes effect between 16:00 on 29 March 2009 and 30 September 2009;
2. (b)
  the transferee has notified the FSA before the transfer takes effect that it wishes this rule to apply;
3. (c)
  before the transfer took effect, the claimant had a protected deposit with each of the transferor and the transferee; and
4. (d)
  the transferee continues to operate the business relating to the transferred protected deposits under the name of the transferor (or such part of the name as is permitted by law).
[Note: The FSA will publish the names of any transferee and the relevant name to which a separate £50,000 limit applies.]
(3)
A transferee to which this rule applies must make and retain a written record of potential claimants for whom the separate limit applies.

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