DCS: 50,000GBP compensation for 1 year only, thereafter 20,000???

  • Anonymous
  • unspecified
  • Offline
Posted: Wed, 29/10/2008 - 10:57

The latest DCS regulations are posted at the following address:
http://www.gov.im/lib/docs/fsc/PressReleases/compensationofdepositorsreg...

KSFIoM depositors' attention is drawn to the following important amendment (see regulations for full text):

Limits of compensation
11. (1) The amount of compensation payable under the Scheme in respect of an eligible protected deposit (“the compensation sum”) is 100% of the amount of the eligible protected deposit, subject to the following provisions of this regulation.
(2) The maximum amount of compensation in the case of each default in respect of each depositor is –
(a) where the depositor is an individual beneficially entitled to the , £50,000;
(b) in any other case, £20,000.*
Footnote:
* This paragraph (i.e. 11(2) ) is superseded on the first anniversary (i.e. 9 Oct 2009) of the approval by Tynwald of the Compensation of Depositors (Amendment) Regulations 2008 (S.D. 844/08)(“the 2008 amendments”) by the following:—
“(2) The maximum amount of compensation in the case of each default in respect of each depositor is £20,000.”,.

COULD SOMEONE PLEASE EXPLAIN IF THIS FOOTNOTE MEANS THAT COMPENSATION WILL BE REDUCED TO 20,000 GBP PER INDIVIDUAL IN THE FOLLOWING INSTANCES:
(1) KSFIoM IS DECLARED IN DEFAULT AFTER 9 OCT 2009;
(2) FSFIoM IS DECLARED IN DEFAULT BEFORE 9 OCT 2009 BUT DEPOSITORS HAVE NOT BEEN PAID COMPENSATION BY 9 OCT 2009.

0
Your rating: None

Comment viewing options
Select your preferred way to display the comments and click "Save settings" to activate your changes.

Doesn't look like bad news

  • ItsTheft
  • 10/10/08 31/05/09
  • a depositor
  • Offline
  • Wed, 29/10/2008 - 11:35

I am no legal expert but this looks to me like they have amended the regulation to reflect their decision to extend the compensation scheme for non-individuals (e.g. charities, corporates, etc.) but to a limit of £20k.

It is not obvious what changes on 9 Oct 2009 but it could be that they are reducing the DCS to £20k per depositor for victims of any banks that default after 9 Oct 2009. Perhaps they simply can't afford another payout of £50k per depositor?

It doesn't look like there is any change to the £50k compensation limit promised to the DSF depositors, which only comes into play IF KSF IOM is wound up AND the payment is a 'top up' (up to a max of £50k) over and above what is paid out by the liquidated bank.