Prudential Regulation Authority Rulebook

8.1

A person other than one which comes within any of paragraphs (7), (8), (9) or (11) of 7.2 is eligible to claim compensation in respect of a contract of long-term insurance.

8.2

1. (1) A person falling within paragraphs (1) – (4) of 7.2 is eligible to claim compensation in respect of a relevant general insurance contract if, at the date the contract commenced, he was a small business.
2. (2) Where the contract has been renewed, the last renewal date shall be taken as the commencement date.

8.3

A person who comes within 7.2(12) is eligible to claim compensation if:

1. (1) the person insured would have been an eligible claimant at the time that his rights against the insurer were transferred to and vested in the person who comes within 7.2(12);
2. (2) the liability of the person insured in respect of the person who comes within 7.2(12) was a liability under a contract of employer's liability insurance which would have been a liability subject to compulsory insurance had the contract been entered into after 1 January 1972 or (for contracts in Northern Ireland) 29 December 1975; or
3. (3) the extent of the liability of the person insured in respect of the person who comes within 7.2(12) had been agreed in writing by the insurer, or determined by a court or arbitrator, before the date on which the insurer is determined to be in default.

8.4

A person who comes within 7.2 is eligible to claim compensation in respect of a liability subject to compulsory insurance if the claim is a claim under a protected contract of insurance.

8.5

The FSCS may treat a person who comes within paragraph (7) or (9) of 7.2 as eligible to claim compensation where:

1. (1) this is desirable to achieve the efficient performance of any of its functions, including without limitation, to facilitate a transfer of business or any part thereof, to secure the issue of policies by another firm to eligible claimants in substitution for their existing policies, to achieve the efficient payment of compensation, to secure under 4.3 the payment of benefits under a contract of long-term insurance; and
2. (2) treating these persons as eligible to claim compensation would, in the opinion of the FSCS, be beneficial to the generality of eligible claimants who will be affected by the action in (1).

8.6

8.7 – 8.12 apply to the FSCS in respect of any claim for a contribution by a responsible person made on or after 25 July 2006 in relation to a mesothelioma victim's claim which is determined by agreement in writing, a court or an arbitrator on or after 3 May 2006.

8.7

In 8.8 – 8.12, references to an insurer include an authorised insurance company, and references to in default include an article 9 default.

8.8

The rules in this Part shall have effect as modified to the extent necessary to enable the FSCS to receive, assess, determine and make payments in respect of applications for compensation from responsible persons in accordance with article 9A of the compensation transitionals order and regulation 3 of the mesothelioma regulations.

8.9

The following specific provisions apply in relation to claims of the type referred to in 8.6:

1. (1) a responsible person is eligible to claim in accordance with the provisions of this chapter;
2. (2) subject to (3), the FSCS may pay compensation to a responsible person where it is satisfied that an eligible claimant has a claim under a protected contract of insurance issued by an insurer that is in default, which, but for satisfaction of that claim by the responsible person, the FSCS would have paid;
3. (3) the FSCS may only pay compensation to a responsible person in accordance with (2) if, having satisfied a claim in relation to a mesothelioma victim, he could claim contribution from an insurer that is in default; and
4. (4) the FSCS may pay compensation in respect of any contribution for which an insurer in default is liable by agreement in writing, or by a determination of a court or arbitrator.

8.10

The requirement in 19.5 to take into account payments to the claimant does not require the FSCS, in paying compensation in respect of such a claim, to take into account payments referred to in that rule made by a responsible person in calculating the claimant’s overall claim.

8.11

8.6 – 8.10 also apply to the extent that any liabilities of an authorised insurance company have been assumed by a successor.

8.12

The FSCS must not pay, in respect of a claim in accordance with the provisions of 8.6 – 8.11, more than the amount that it would have paid if the mesothelioma victim (or a responsible person other than an insurer of such a person) to whom the contribution claim relates had made that claim directly against the FSCS.