Three out of four Kaupthing savers will get money back

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2009-06-29 16

Three out of four Kaupthing savers will get money back

Manx Treasury officials estimate that three out of four savers with collapsed bank Kaupthing Singer & Friedlander (Isle of Man) will be repaid in full but customers who held deposits through life assurance bonds will not be so fortunate.

According to the pressure group Kaupthing Singer & Friedlander (Isle of Man) Depositors Action Group there are nearly 2,000 KSFIOM customers who held £300 million with the bank through life assurance bonds

Manx Treasury officials estimate that three out of four savers with collapsed bank Kaupthing Singer & Friedlander (Isle of Man) will be repaid in full under the Manx Depositor Compensation Scheme (DCS).

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Royal London 360º, formed from the merger of Scottish Life International and Scottish Provident International last year, said it removed all Icelandic banks from its panel in early 2008, months before the KSFIOM collapse.

David Kneeshaw, chief executive of Royal London 360º, said: "We recognised the country risk of Iceland and any customer who specifically wanted to go with an Icelandic bank had to sign a disclaimer."

The life office continues to monitor bank safety and its panel excludes all but the major global banks and those backed by the UK government.

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The KSFIOM Depositors Action Group criticises the life offices for taking charges out of the £10,000 early payments and out of future recoveries.

It says the KSFIOM affair shows that "offshore bonds offer none of their much-vaunted safety and security – even life companies finally need to admit this vehicle is not fit and proper for the task".