FSCS to start compensating Enterprise customers

The Financial Services Compensation Scheme (FSCS) has released further updates about how it will start to compensate customers of collapsed insurer Enterprise.

From midnight today, motor policies with Enterprise Insurance will be terminated.

The FSCS has been working closely with the provisional liquidator Freddie White, of Grant Thornton to decide how to best compensate consumers.

The scheme has started to pay Enterprise indemnity claims and is also preparing to cover the return of premium for customers from today, starting with motor insurance.

FSCS is finalising how it will pay the compensation and has said it is likely to pay this in three ways:

It will pay finance companies where customers have bought the cover using a loan.

For customers who bought their cover using credit from premium finance houses; Close Brothers and Premium Credit, the FSCS will pay the compensation directly to them and it will go towards paying back the loan.

If a broker has been able to block transfer all of their Enterprise business to one new insurance provider, FSCS will pay the broker the return of premium compensation.

The broker is then expected to pass this on to the new insurance provider.

If the broker has rearranged cover with another insurer on an individual case by case basis, rather than block booked, then FSCS will pay the compensation directly to the customer by cheque.

For customers who do not fit either of the two categories the FSCS will pay the compensation directly to them by cheque.

In a statement the FSCS said: “We will begin making return of premium payments in the next few days and will continue to do so as we receive policy data from brokers and the Provisional Liquidator and, in any event, well within 90 days.

“You should ensure that you buy a new insurance policy to avoid breaking the law by not having insurance.”