Financial Services Compensation Scheme (FSCS)

Financial Services Compensation Scheme (FSCS)

Learning Objectives

At the end of the lesson you should understand the purpose and function of the UK's Financial Services Compensation Scheme (FSCS).

What do you already know about the Financial Services Compensation Scheme (FSCS)?

Purpose and Function of the FSCS

The FSCS is the UK's statutory fund of last resort for customers of authorized financial services firms.

Eligibility and Coverage of the FSCS

It provides compensation when firms fail and cannot pay claims, primarily assisting private individuals and small businesses with a turnover of less than £1 million.

Types of Insurance Policies and Compensation Levels

The FSCS covers various insurance policies, offering 100% protection for compulsory insurance, professional indemnity, long-term insurance, and claims related to injury or infirmity.

Funding of the FSCS and Responsible Parties

It is funded by a levy on all authorized firms that receive an income from eligible contributions.

FSCS: A UK statutory scheme that provides compensation to customers when authorized financial services firms fail

Compulsory insurance

Insurance that is legally required, such as third-party motor insurance

Long-term insurance

Insurance that covers individuals over an extended period, such as life insurance and pensions

Professional indemnity insurance

A type of insurance that covers professionals against claims of negligence or malpractice

Eligible contributions

Revenues from authorized firms that are used to fund the FSCS

Write down 3 things you learned in this lesson.

Have students enter three things they learned in this lesson. With this they can indicate their own learning efficiency of this lesson.

Write down 2 things you want to know more about.

Here, students enter two things they would like to know more about. This not only increases involvement, but also gives them more ownership.

Ask 1 question about something you haven't quite understood yet.

The students indicate here (in question form) with which part of the material they still have difficulty. For the teacher, this not only provides insight into the extent to which the students understand/master the material, but also a good starting point for the next lesson.