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COMP 11.1 Application and Purpose


COMP 11.1.1 R

This chapter applies to the FSCS.

COMP 11.1.2 G

It is also relevant to claimants.


COMP 11.1.3 G

The FSCS will usually pay compensation direct to the claimant, but in certain circumstances it may be appropriate for the FSCS to pay compensation to someone other than the claimant, or to make reduced or interim payments. The purpose of this chapter is to set out when those circumstances arise.

COMP 11.2 Payment

To whom must payment be made?

COMP 11.2.1 R

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

COMP 11.2.2 R

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.

Reduced or interim payments

COMP 11.2.4 R

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 net claim, it may decide to pay an appropriate lesser sum in final settlement, or to make payment on account.1

COMP 11.2.5 R

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 11.2.6 R

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.

COMP 11.2.6A G

1 COMP 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 11.2.7 R

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

COMP 11.2.8 R

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.