Prudential Regulation Authority Rulebook

22.1

With effect on and from 3 July 2015, the rules in this Part apply to defaults or circumstances giving rise to arrangements made under 4.1 or measures taken under 5.1 or other such actions of the FSCS or any levy levied by the FSCS.

22.2

Prior to 3 July 2015, the rules in COMP and/or FEES (as the case may be) apply to defaults or circumstances giving rise to arrangements made under COMP 3.3.1R or to measures taken under COMP 3.3.3R or other such actions of the FSCS or any levy levied by the FSCS.

22.3

In this Part:

1. (1) subject to (3), a claim under a protected contract of insurance includes a claim in respect of an article 9 default;
2. (2) where the claim is in respect of an article 9 default, the FSCS must apply the rules of the relevant former scheme, as they applied to the default before 1 December 2001 unless (3) applies;
3. (3) a claim must be treated as a claim in relation to a protected contract of insurance under 9.6 if the conditions in article 9A or 10(1)(a)–(d) of the compensation transitionals order are satisfied.

22.4

The rules of the Friendly Societies Protection Scheme are amended so that:

1. (1) references to the person managing the scheme are replaced by references to the FSCS; and
2. (2) references to functions conferred upon the Friendly Societies Protection Scheme Board are replaced by references to functions conferred upon the FSCS.

22.5

1. (1) Any recoveries made by the FSCS after 31 March 2008 in relation to protected claims compensated prior to 1 April 2008, the costs of which were allocated to the relevant contribution group in place at the time, must be credited to the insurance class in place after 31 March 2008 to which the costs of the protected claims would have been allocated had it been compensated after that date, or if relevant, in accordance with FEES 6.3.20 R.
2. (2) (1) does not apply to the extent that it is inconsistent with the compensation transitionals order.

22.6

For the purpose of FEES 6.5.13 R as it applied with respect to the FSCS’s financial year beginning on 1 April 2008, references in FEES 6.5.13 R to an insurance class must be read as references to an insurance class to which a participant firm belonged to on or after 31 March 2008.

22.7

The amendments made by the Fees Manual (FSCS Funding) Instrument 2007 to:

1. (1) FEES 6.5.16 R only has effect before 1 April 2008 for the purpose of FSCS’s financial year beginning on 1 April 2008;
2. (2) FEES 6 applies to any levy made after 31 March 2008. This is so even if:
1. (a) the claim against the participant firm in default arose or relates to circumstances arising before that date;
2. (b) the participant firm was in default before that date; or
3. (c) the levy relates to arrangements made or measures taken under COMP 3.3 before that date.

22.8

1. (1) This rule adjusts the calculation of the tariff base for insurance classes B1 (General insurance provision) and C1 (Life and pensions provision). It applies if the participant firm is in run-off and has been in run-off since 1 November 2008.
2. (2) The whole of the levy is calculated by reference to relevant net premium income instead of being split 75:25 between relevant net premium income and eligible gross technical liabilities or mathematical reserves.
3. (3) A participant firm is in run-off for these purposes if:
1. (a) it has ceased to effect new contracts of insurance;
2. (b) its permission for effecting contracts of insurance has been cancelled;
3. (c) its exclusive remaining business is administering its remaining insurance liabilities; and
4. (d) where it is required to supply one, it has supplied a run-off plan under SUP App 2.8.1R.