4. Q & As for General Insurance

4.1. Would I still get FSCS protection if I stopped paying my insurance premiums?

If you stopped paying your insurance premium your insurance cover may end immediately and the FSCS may not be able to pay your claim. You would need to speak to the insolvency practitioner or an adviser for guidance on the payment of future premiums and the consequences of stopping payments.

4.2. What would the FSCS do if [insert firm name] were to become insolvent?

The FSCS's role is to protect policyholders. In the unlikely event that we became insolvent the FSCS would work with the insolvency practitioners, who would be responsible for the ongoing administration of our firm and the settlement of claims.

Any queries relating to policies or claims would be directed in the first instance to the insolvency practitioners.

The FSCS would work with the insolvency practitioners to ensure that policyholders had clear instructions on how to make a claim and what to do if they need immediate assistance.

The FSCS can provide funds to meet protected claims, including return of premiums, if a firm is unable to do so. The Scheme can also try to arrange (or assist) a transfer of some of the business to other insurers, if this is cost effective and practical.

4.3. How long would it take to settle claims and make payments to policyholders?

The appointed insolvency practitioners would be responsible for processing claims for compensation. However, the FSCS would work with the insolvency practitioners to enable payment of claims as quickly as possible. All claims are dealt with on a case by case basis.

4.4. Is a charity covered if their insurance company fails?

In respect of the general insurance scheme, a charity would be treated as having a claim, and hence protection in its own right, if it fell within the definition of a "small business". A small business is defined as a partnership, body corporate, unincorporated association or mutual association with an annual turnover of less than £1 million (or its equivalent in any other currency at the relevant time). There is generally no size criterion in the case of life insurance (COMP 4.3.2R).


The FCA

The Financial Conduct Authority website includes a searchable database of all firms authorised and regulated by the FCA and the Prudential Regulation Authority (PRA).

The FOS

The Financial Ombudsman Service is the official independent expert in settling complaints between consumers and financial businesses

Jargon Buster

  • Insolvency

    having insufficient assets to meet due debts or liabilities.
  • Mutual

    An organisation with no stockholders. Profit, losses and expenses are shared by members.