Compliance Essentials

Financial Claims Scheme update

Category: Financial Services | by David Jacobson

Legislation for the Financial Claims Scheme (incorporating the government guarantee on financial institution deposits announced on 12 October 2008) will be introduced soon.

Apart from the deposit guarantee it will also deal with a general insurance failure, such as HIH:

  • eligible policyholders with a valid claim against the failed insurer will receive a payment under the scheme equivalent to the value of their claims, less any excess or deductible amounts.
  • Eligibility for coverage for general insurance policyholders will be limited to individuals, small businesses and not-for-profit organisations.

    • Investment products, such as superannuation, life insurance, and managed funds will not be covered by the FCS or products offered by institutions which are not regulated by APRA.

    Other products offered by life insurers or friendly societies will be excluded from the FCS.

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