Spain: FSCS and FSA deserted us

Independent Insurance's Spanish policyholders have accused the UK's financial regulation and compensation authorities of abandoning them, despite promises in Independent's paperwork that they were protected by the UK authorities.

London-based solicitor Inka Piegsa-Quishotte, who represents the majority of Independent's Spanish policyholders and brokers, said claims worth £2.3m were still unpaid, more than a year after the insurer's collapse.

"Having previously agreed to consider the Spanish policies on an individual basis, the Financial Services Compensation Scheme (FSCS) now categorically denies that the policies are subject to both protection and compensation," she said.

"Yet all policy documentation clearly states that Independent is controlled by the UK and the Treasury, and therefore the Financial Services Authority (FSA), as well as the FSCS.

"They also continue to dispute the submission of claims for employers' liability (EL), even though insurance covering EL is compulsory in Spain."

The FSA said it had no comment to make about the situation of the Spanish policyholders. An FSA spokeswoman then directed inquiries to the FSCS.

The FSCS said its forerunner, the Policyholders' Protection Board, originally rejected the claims.

"The FSCS has also looked at them again and finds that the claims are against policies we can't define as UK policies as required under the terms of the Policyholders' Protection Act 1975, so are unable to provide compensation," an FSCS spokeswoman said.

Meanwhile, Independent liquidator PricewaterhouseCoopers (PWC) confirmed it was working on a deal with Spain's brokers as part of PWC's compromise over the return of commissions.

Piegsa-Quishotte said PWC had "acknowledged" Independent's mistakes and promised to set up a structure specifically for dealing with Spanish brokers.