FSCS will announce Keydata Lifemark findings in September
Share
The Financial Services Compensation Scheme will announce in September whether Lifemark customers will be able to claim for compensation.
Around 23,000 Keydata clients have invested approximately £349m in Lifemark, which has halted income payments to preserve liquidity and maintain the value of the policies.
In an announcement today, the FSCS says it has been carrying out investigations to learn more about what has happened, what it means for investors and whether the FSCS will have a role in compensating investors for any losses.
The announcement states: “In particular, we have been considering whether Keydata is legally liable for any capital losses that may arise for investors in funds backed by Lifemark and whether we can pay compensation.
“These investigations are now at an advanced stage, and we hope to be able to confirm our position in relation to the potential liability of Keydata during September.”
The FSCS says it has been consulting with the FSA, Keydata’s administrators PricewaterhouseCoopers and the other parties involved in the restructuring proposals.
It adds: “There is currently uncertainty around when the parties will be in a position to update investors on the timing and terms of any proposal. Whilst this remains unresolved it is unclear what losses investors may suffer.
“We will continue to monitor the situation and consider the implications for any compensation we may pay.”
US hedge fund CarVal is understood to have recently provided Lifemark with short-term funding to help sustain the company and preserve the value of policies held by thousands of Keydata investors.
CarVal is thought to have proposed a £40m loan to Lifemark to pay premiums and return original capital to investors over a 14-year timeframe depending on the performance of Lifemark assets.
If you enjoyed this article, sign up here to receive daily email updates from Money Marketing and Follow @_moneymarketing
Readers' comments (1)
Rod Leonard | 22 Jul 2010 4:52 pm
Redistribution of the IFA's wealth cannot continue, as we won't have anything left to pay into the FSCS. I hadnt realised we had turned into a Communist state.
Unsuitable or offensive? Report this comment