The Financial Services Compensation Scheme’s decision to recognise 100 per cent losses at Lifemark comes after months of campaigning.
The FSCS said last week it will take the view that investors in Luxemburg-based Lifemark’s traded life settlements, in which £349m was invested, have lost 100 per cent of their investment for claim purposes. This means that investors can claim compensation, from December, up to the £48,000 FSCS limit.
Investors had feared that Lifemark losses were unquantifiable because the settlements technically retain some value but it could take several years to be realised.
Investor Peter Roy Hilton and his wife put a “considerable proportion” of their life savings in Lifemark bonds and he has led the compensation campaign since income payments were stopped in February.
He says: “It is good news. It is what we have been working our socks off to achieve for the last five months now. It allows the FSCS to take out the small investors quickly without destroying the hopes of the larger investors to recover their savings.”
AWD Chase de Vere head of communications Patrick Connolly says: “The announcement means investors now have clear information on which to decide what to do next.”
FSCS claims are likely to be paid for by the intermediary sub-class. If the sub-class is hit with claims for more than £100m in one year, April to March, then any further claims will be paid for by the investment provider sub-class up to a total limit for the investment class of £370m.
Any further claims in one year will be paid for by the general retail pool.