FSCS and the FSCR
This section sets out the FSCS rules that apply to firms in the FSCR after the end of the transition period.
Deposit-takers with an establishment in the UK, and insurers that are in the FSCR, are members of the FSCS and are expected to comply with the respective Parts of the PRA Rulebook. No transitional relief is available.
SS18/15 ‘Depositor and dormant account protection’ has been updated and describes the PRA’s expectations.
Deposit-takers in the SRO
Depositors with eligible deposits held by UK establishments of firms with Part 4A permission to accept deposits (or deemed Part 4A permission, in the case of SRO firms) are protected by the FSCS.
Note: there is a waiver by consent available to waive certain requirements contained in the Depositor Protection Part of the PRA Rulebook in relation to Continuity of Access. More information is available on the EU withdrawal – Temporary permissions regime page.
Deposit-takers in the CRO
Deposits held outside of UK establishments (which may include deposits held by CRO firms) are not protected by the FSCS.
Insurance Policies issued before the end of the transition period
Existing FSCS protection for insurance policies issued prior to the end of the transition period will be maintained as long as the insurer remains a ‘relevant person’ under FSMA. The term ‘relevant person’ includes a person that was an ‘authorised person’ under FSMA at the time of the act or omission giving rise to the claim. EEA firms in the SRO and CRO are authorised persons for this purpose and are also required to pay FSCS levies.
Insurance Policies issued after the end of the transition period
The FSCR provides limited permissions for firms to perform existing contracts and does not allow a firm to carry out regulated activities in relation to new contracts, except where necessary to service pre-existing contracts. If policies are issued after the end of the transition period by SRO insurers with a UK establishment, FSCS protection applies as it does for policyholders of insurers in the TPR, where policies in respect of risks situated in the UK, Channel Islands, Isle of Man or Gibraltar are eligible for protection. If there are policies issued after the end of the transition period by SRO or CRO insurers without a UK establishment, FSCS protection is only available in respect of risks situated in the UK.
Insurers no longer in the FSCR
There are a number of reasons why insurers could cease to be a ‘relevant person’. If a firm is no longer a ‘relevant person’ at the time the act or omission that give rise to the claim occurs (or the policies have not been transferred to a ‘relevant person’), FSCS protection will not be available. Existing FSCS protection will continue to be available for claims in relation to acts or omissions that arose before the loss of status.
The FCA is responsible for rules relating to FSCS protection for the following activities: investment provision, investment intermediation, insurance intermediation, debt management and home finance intermediation. For more information about the FCA’s approach for FSCS cover for firms in the FSCR, please refer to the FCA website.