Strathearn Insurance Services Ltd

24 Sep, 2019

Claims made against Strathearn have now all been moved to our claims processing teams for assessment. Decisions on these claims will be sent out shortly.

23 Aug, 2019

FSCS has completed its investigation into Strathearn Insurance Services Ltd (SISL) and has concluded that we may be able to pay compensation for claims.

FSCS doesn’t protect direct investments into property; however, we may protect insurance products.

The documentation SISL provided to its customers has been key to our investigation.  We have concluded that SISL carried out regulated arranging and owes a civil liability to customers in this regard, meaning that we may be able to pay compensation.    

Specifically, the key features document (KFD) that SISL provided to customers was misleading. It appeared to guarantee that, in the event of a contractual default (i.e., IPIN’s failure), customers’ deposits into the property scheme would be 100% protected by a property deposit bond (PDB).  The PDB, however, was provided by an undisclosed offshore insurer that was not protected by a compensation scheme, such as FSCS. The insurer also failed, making the supposed protection for customers worthless.   

The information SISL provided gave customers the impression that their property deposits were protected in all scenarios and that the investment was risk free, which was clearly not the case.

Claims received against SISL will shortly be passed to FSCS’s claims assessment teams to be considered for compensation. The approach for compensation will be based on our insurance methodology because customers’ losses stem from the misleading information provided about the PDB, which is an insurance product.  Customers with valid claims will, therefore, receive compensation of 90% of their investment deposit.

We are aware that the Financial Ombudsman Service (FOS) has previously considered some claims against SISL, but FSCS is required to assess claims and calculate compensation in line with our own rules.  In this case, the rules that apply are FSCS’s rules for claims against insurance brokers, which limit compensation to 90%.

14 Jun, 2019

FSCS’s investigations into Strathearn Insurance Services Ltd are continuing. Right now, our legal team are looking at the activities that Strathearn carried out to identify the specific regulatory breaches that may have occurred.

FSCS understands that many former clients of Strathearn had active complaints with the Financial Ombudsman Service (FOS) at the time the firm went into liquidation. We've been working closely with the FOS to make sure FOS complaint files are transferred to FSCS. Once FOS complaint files are received, FSCS will contact customers and advise them on what they should do next.

20 May, 2019

Although FSCS is accepting claims against Strathearn Insurance Services Ltd (Strathearn), claims have not yet been passed to our claims processing teams for assessment. This is because we are carrying out initial investigations into the activities of Strathearn.

Firstly, we need to establish whether there are ‘protected claims’ against Strathearn. For this to happen we need to know that Strathearn owes a civil liability to customers that would enable them to sue the firm in court. 

Importantly, this civil liability must be in connection with a regulated activity carried out by the firm. Currently our investigations are focussing on the documentation which Strathearn provided to customers. This analysis will help us reach a view on what regulatory breaches may have occurred.