The Financial Services Compensation Scheme (FSCS), the UK's financial statutory fund has reported the receipt of unprecedented numbers of endowment claims in the first six months of the financial year 2005/06.
Nearly 10,000 new endowment claims were received by FSCS between April and September 2005, compared to a January forecast of 7,000 for the full year (1 April 2005 – 31 March 2006).
FSCS now estimates that as many as 22,000 new endowment claims will be received during 2005/06.
Loretta Minghella, chief executive of FSCS said: "As ever the challenge for FSCS is to strike the right balance between providing an efficient and timely service to consumers with our responsibility to the industry to keep costs under control."
FSCS said it is increasing its resources in house and extending its use of outsourcing to enable it to process higher volumes and to bring claims processing times down.
The FSCS is funded by annual levies on financial services companies regulated by the FSA. Levies are adjusted according to the level of claims anticipated in the coming year.
FSCS said it has been involved with only two failures in the insurance broking sectors, Whiteley Insurance Consultants and BPS Insurance Brokers, with no major
claims falling to FSCS so far.
It also said that it continues to audit the work of run-off agents for the major insurance estates such as Independent and Chester Street, and continues to make substantial recoveries in this sector as further dividends are paid.
Since 1 December 2001 the FSCS said it has recovered over £261m from insolvent firms, mainly from the insurance sector. It added that so far £48.5m has been recovered this year in this sector and it is now expecting a further significant dividend from the KWELM estate.