Prudential Regulation Authority Rulebook

3.1

The FSCS may pay compensation to an eligible claimant, subject to 18, if it is satisfied that:

1. (1) an eligible claimant has made an application for compensation (or falls within the category of persons referred to in 3.2);
2. (2) the claim is in respect of a protected claim against a relevant person (or where applicable, a successor) who is in default;
3. (3) where the FSCS so:
1. (a) requires, the claimant has assigned the whole or any part of his rights under the protected contract of insurance against the relevant person (or where applicable, a successor) or against any third party to the FSCS, on such terms as the FSCS thinks fit; and/or
2. (b) determines, the claimant has immediately and automatically subrogated all or any part (as determined by the FSCS) of its rights and claims against the relevant person (or where relevant, a successor) under the protected contract of insurance or against any third party to the FSCS, on such conditions (under 13) as the FSCS thinks fit; and
4. (4) it:
1. (a) is not reasonably practicable or appropriate to make, or continue to make, arrangements to secure continuity of insurance under 4.1; and/or
2. (b) would not be appropriate to take, or continue to take, measures under 5.1 to safeguard policyholders of a relevant person in financial difficulties.

3.2

The FSCS may treat persons who are or may be entitled to claim compensation as if they had done so.

3.3

The FSCS may pay compensation (and any recovery or other amount payable by the FSCS to the claimant) to a person who makes a claim on behalf of another person if the FSCS is satisfied that the person on whose behalf the claim is made:

1. (1) is or would have been an eligible claimant; and
2. (2) would have been paid compensation by the FSCS had he been able to make the claim himself, or to pursue his application for compensation further.

3.4

Notwithstanding any provision in this Part to the contrary, the FSCS may:

1. (1) pay compensation in accordance with 18;
2. (2) secure continuity of a contract of long-term insurance in accordance with 4.1;
3. (3) make a payment to an eligible claimant in accordance with 4.3;
4. (4) take such measures as it considers appropriate in accordance with 5.1; or
5. (5) make a payment to an insurer under write-down in accordance with 5A.1, so as to enable the insurer under write-down to pay a top-up amount in respect of a written-down claim in accordance with 5A.4;
6. without fully or at all investigating the eligibility of the claimant and/or the validity and/or amount of the claim, if in the opinion of the FSCS:
1. (a) the costs of investigating the merits of the claim are reasonably likely to be disproportionate to the likely benefit of such investigation; and
2. (b) (as a result or otherwise) it is reasonably in the interests of relevant persons to do so.