Financial Services Compensation Scheme

FINANCIAL SERVICES COMPENSATION SCHEME

Rowlands & Hames Insurance Brokers are covered by the Financial Services Compensation Scheme (FSCS).

You may be entitled to compensation from the scheme if we cannot meet our obligations.

This depends on the type of business and the circumstances of the claim. Until 31st December 2009 Insurance advising and arranging is covered for 100% of the first £2,000 and 90% of the remainder of the claim without any upper limit.

From 1st January 2010 Insurance advising and arranging is covered for 90% of the claim, without an upper limit. For compulsory classes of insurance (such as Third Party Motor or Employers’ Liability), insurance advising and arranging is covered for 100% of the claim, without any upper limit.

Further information about compensation scheme arrangements is available from the FSCS on 020 7892 7300 or www.fscs.org.uk.

What is the FSCS?

The FSCS is the UK's compensation fund of last resort for customers of authorised financial services firms. The FSCS may pay compensation if a firm is unable, or likely to be unable, to pay claims against it. This is usually because it has stopped trading or has been declared in default.

Impartial and independent

The FSCS is independent of the government and the financial industry, and was set up under the Financial Services and Markets Act 2000, becoming operational on 1 December 2001 (although it still cover claims from before this date). It do not charge individual consumers for using its service.

What the FSCS covers

The FSCS covers business conducted by firms authorised by the Financial Services Authority (FSA), the independent watchdog set up by government to regulate financial services in the UK and protect the rights of consumers. European firms (authorised by their home state regulator) that operate in the UK may also be covered.

The FSCS protects:

• deposits,
• insurance policies,
• insurance broking (for business on or after 14 January 2005), including connected travel insurance where the policy is sold alongside a holiday or other related travel (e.g. by travel firms and holiday providers) (for business on or after 1 January 2009);
• investment business, and
• home finance (for business on or after 31 October 2004).

There are limits to the protection available

As a fund of last resort there are limits to what the FSCS can do, and to the amounts of compensation the Scheme can pay. Its rules set out the protection FSCS can provide. These form part of the FSA Handbook of rules and guidance, and can be found under Redress, Compensation.