Motorcycle intermediary Carole Nash is set to resume business with Zenith Insurance following Financial Services Authority (FSA) confirmation that policyholders of Gibraltar-based insurers are protected by the Financial Services Compensation Scheme (FSCS).

In a letter to its Gibraltar counterpart, the Financial Services Commission (FSC), the FSA said: "The general position is that policyholders taking out policies with Gibraltar-based insurance companies, which are sold in the UK, are covered by the compensation scheme established under the Financial Services and Markets Act."

In May, several insurance brokers had raised doubts about Gibraltar-based insurers, and their policyholders, being covered by the FSCS.

FSC insurance supervisor Jim Costin said the letter was good news and left only minor details to be sorted out.