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Daily Insurance Industry News
Sunday 18th of November 2018
December 18, 2007

General insurers to benefit from £40 million FSCS refund

by Gill Montia

Story link: General insurers to benefit from £40 million FSCS refund

General insurance companies will be receiving a refund from the Financial Services Compensation Scheme (FSCS), in the New Year.

The scheme, which is the UK’s statutory fund of last resort for customers of authorised financial services firms, collects a levy from the insurance sector so it can pay compensation if a firm is unable, or likely to be unable, to pay claims against it.

The insurance industry pays the levy into contribution groups, specific to areas of business.

According to Loretta Minghella, FSCS chief executive, the refund, which amounts to £40 million in total, “is good news for general insurance firms”.

It comprises continuing recoveries from the estates of general insurance providers who have been placed in administration and also reflects lower than expected claims volumes and compensation payments.

Around 250 insurance companies will receive the refund in January 2008 and because payments will be made prior to FSCS funding system changes to be implemented in April of next year, it will only apply to the general insurance contribution group (A3).

 

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