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You are viewing the version of the document as on 2023-12-01.

COMP 11.2 Payment

To whom must payment be made?

COMP 11.2.1R


COMP 11.2.1AR

8If the FSCS determines that compensation is payable (or any recovery or other amount is payable by the FSCS to the claimant), it must pay it to the claimant, or if the FSCS so decides,5 as directed by the claimant, unless COMP 11.2.2 R, COMP 11.2.2AR or COMP 11.2.2CR 7 apply.


7Certain protected investment business claims

COMP 11.2.2R

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.

7Collective investment scheme claims

COMP 11.2.2AR

6Where a claimant has a claim that falls within COMP 12A.3.1R, the FSCS may pay any compensation to:

  1. (1)

    the participants and not to the claimant; or

  2. (2)

    the collective investment scheme and (where different) not to the claimant; or

  3. (3)

    any combination of the above.

COMP 11.2.2BG

6As a result of COMP 12A.3.1R, the FSCS must try to ensure that the amount paid is no more than the amount of the loss suffered by the participant.

7Protected funeral plan business claims

COMP 11.2.2CR

7Where a claimant has a protected funeral plan business claim the FSCS may pay compensation (and any recovery or other amount payable by the FSCS to the claimant) to any other person on such terms and on such conditions as it thinks fit.

COMP 11.2.2DG

7COMP 3.2.2R permits the FSCS to pay compensation to a person who makes a claim on behalf of another person where certain conditions are satisfied. This includes payment to the personal representatives who make a claim on behalf of the deceased (see COMP 3.2.3G)(1)). COMP 11.2.2CR permits the FSCS to pay compensation to any other person who it considers should receive the compensation. For example, this may be to a funeral services provider directly where the funeral services provider has incurred expenses in providing funeral services under the funeral plan contract and is yet to be reimbursed.

Form and method of paying compensation

COMP 11.2.3AR

4The FSCS may pay compensation in any form and by any method (or any combination of them) that it determines is appropriate including, without limitation:

  1. (1)

    by paying the compensation (on such terms as the FSCS considers appropriate) to an authorised person with permission to accept deposits which agrees to become liable to the claimant in a like sum;

  2. (2)

    by paying compensation directly into an existing deposit account of (or for the benefit of) the claimant, or as otherwise identified by (or on behalf of) the claimant, with an authorised person (but before doing so the FSCS must take such steps as it considers appropriate to verify the existence of such an account and to give notice to the claimant of its intention to exercise this power); and/or6

  3. (3)


  4. (4)

    4by paying compensation to a firm, which makes a claim on behalf of its clients, if the FSCS is satisfied that:

    1. (a)

      the business of a relevant person in default has been transferred to the firm;

    2. (b)

      each client has a claim against the relevant person in default arising out of a shortfall in client money or safe custody assets5 held by the relevant person in default;

    3. (c)

      the clients in respect of which compensation is to be paid satisfy the conditions set out in COMP 3.2.2 R (1); and

    4. (d)

      the firm has agreed, on such terms as the FSCS thinks fit, to pay, or credit the accounts of, without deduction, each client, that part of the compensation due to him.

Reduced or interim payments

COMP 11.2.4R

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

COMP 11.2.5R

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.

COMP 11.2.6R

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 an6 ICD claim.

COMP 11.2.6AG

1COMP 11.2.4 R applies to compensation payable in connection with any protected claim. It would, for example, apply to the situation where the FSCS considers it imprudent to make a payment in full because of uncertainty as to the value a court might attribute to a bonus provided for under a long-term insurance contract. In such circumstances the FSCS may make payment of compensation on account to the policyholder in respect of benefits under the contract the value of which is not uncertain.

Paying interest on compensation

COMP 11.2.7R

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

COMP 11.2.8R

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.

Paying full compensation in return for rights

COMP 11.2.9R

4Where the FSCS considers that the conditions in COMP 11.2.4R are satisfied but, in relation to a class of claim, in order to provide fair compensation for the generality of such claims it would be appropriate to take the approach in (1) and (2) rather than pay an appropriate lesser sum in final settlement or make a payment on account, it may for that class of claim:

  1. (1)

    receive whether by assignment, transfer or operation of law the whole or any part of a claimant's rights against the relevant person (or, where applicable, a successor)5, or against any third party, or both on such terms as the FSCS thinks fit; and

  2. (2)

    disregard the value of the rights so received in determining the claimant's overall claim.

COMP 11.2.10G

4Factors that the FSCS may take into account when considering taking the approach in COMP 11.2.9R (1) and COMP 11.2.9R (2) include whether the amount of claimants' overall claims are likely to be assessed within a reasonable time frame, the circumstances of the claimants, the circumstances of the claims and the nature of the products to which the claims relate.