This chapter applies to the FSCS.

If the FSCS determines that compensation is payable (or any recovery or other amount is payable by the FSCS to the claimant),2 it must pay it to the claimant, or as directed by the claimant, unless:

1. (1)

   arrangements have or are being made to secure continuity of insurance under COMP 3.3.1 R to COMP 3.3.2E R or the FSCS is taking measures it considers appropriate to safeguard eligible claimants under COMP 3.3.3 R to COMP 3.3.6 R; or

2. (2)

   COMP 11.2.2 R or COMP 11.2.3 R applies.1

Where a claimant has a protected claim arising out of the circumstances described in COMP 12.4.5 R, the FSCS must pay any compensation (and any recovery or other amount payable by the FSCS to the claimant) 2to:

1. (1)

   the trustee of an occupational pension scheme; or

2. (2)

   a personal pension scheme or other product provider; or

3. (3)

   both (1) and (2);

and not to the claimant, unless exceptional circumstances apply.

If the FSCS is satisfied that in principle compensation is payable in connection with any protected claim, but considers that immediate payment in full would not be prudent because of uncertainty as to the amount of the claimant's overall claim3, it may decide to pay an appropriate lesser sum in final settlement, or to make payment on account.1

The FSCS may also decide to make a payment on account or to pay a lesser sum in final settlement if the claimant has any reasonable prospect for recovery in respect of the claim from any third party or by applying for compensation to any other person.

The FSCS may not pay a lesser sum in final settlement under COMP 11.2.4 R and COMP 11.2.5 R where the claim is a DGD claim or ICD claim.

The FSCS may pay interest on the compensation sum in such circumstances as it considers appropriate.

Interest under COMP 11.2.7 R is not to be taken into account when applying the limits on the compensation sum payable in respect of a claim under COMP 10.