Prudential Regulation Authority Rulebook

11.1

A successor is a person who has assumed responsibility for liabilities arising from acts or omissions of a relevant person.

11.2

Subject to 11.6, a successor is in default if the FSCS has determined it to be in default under 11.3 and/or 11.4.

11.3

The FSCS may determine a successor to be in default when it is, in the opinion of the FSCS, or the PRA:

1. (1) unable to satisfy protected claims against it; or
2. (2) likely to be unable to satisfy protected claims against it.

11.4

The FSCS may determine a successor to be in default if it is satisfied that a protected claim exists, and the successor is the subject of one or more of the following proceedings in the UK (or of equivalent or similar proceedings in another jurisdiction):

1. (1) the passing of a resolution for a creditors' voluntary winding up;
2. (2) where relevant, a determination by the successor’s Home State regulator or other competent authority that the successor appears unable to meet claims against it and has no early prospect of being able to do so;
3. (3) the appointment of a liquidator or administrator, or provisional liquidator or interim manager;
4. (4) the making of an order by a court of competent jurisdiction for the winding up of a company, the dissolution of a partnership, the administration of a company or partnership, or the bankruptcy of an individual; or
5. (5) the approval of a company voluntary arrangement, a partnership voluntary arrangement, or of an individual voluntary arrangement.

11.5

For claims arising in connection with a successor in default in accordance with this chapter, the FSCS must treat any term in the successor’s constitution or in its contracts of insurance, limiting its liabilities under a contract of long-term insurance to the amount of its assets, as limiting its liabilities to any claimant to an amount which is not less than the gross assets of the undertaking.

11.6

The FSCS may not declare a successor that is a member to be in default unless it is satisfied that the amounts which the Society may provide from the Central Fund are or are likely to be insufficient to ensure that claims against the successor that is a member under a protected contract of insurance will be met to the level of protection which would otherwise be available under this Part.