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FSCS starts extra payouts to Lifemark customers after recoveries

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The Financial Services Compensation Scheme has started making payments to Lifemark customers whose claims were more than the maximum compensation limit.

Consumers who bought Lifemark-backed products through Keydata Investment Services will be paid from recoveries made by FSCS, a major bondholder in Lifemark. 

People who had more than £30,000 invested at the time of the failure will get additional payments amounting to up to 6.5 per cent of their claim.

The move follows the FSCS receiving distributions of assets from Lifemark’s Trustee.

In June the FSCS started paying 7.5p in the pound to Keydata investors from money it had recovered from Lifemark. It brings total payments to 14 per cent.

In its plan and budget in February, the FSCS said it expects total Keydata recoveries of around £75m over the next two to three years.

In its August newsletter the FSCS said bondholders of Keydata subsidiary Lifemark, including the FSCS, will only receive 12 per cent to 15 per cent of capital before costs.

Keydata invested customers’ money in around £349m of bonds issued by Lifemark, which in turn invested in US life settlement policies.

The firm was put into administration in June 2009 and Lifemark was placed into “provisional administration” in November 2009.

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