COMP 3.3 Continuity of funeral plan contracts

The FSCS may make arrangements to secure continuity of a funeral plan contract for an eligible claimant who has a funeral plan contract if:

1. (1)

   the contract is with a relevant person (or, where applicable, a successor) that is in default;

2. (2)

   it is reasonably practicable to do so;

3. (3)

   in the opinion of the FSCS at the time it proposes to make the arrangements, it would be beneficial to the generality of eligible claimants covered by the proposed arrangements; and

4. (4)

   in situations where the cost of securing continuity of funeral plan contracts might exceed the cost of paying compensation, any additional cost is likely to be justified by the benefits.

When assessing the cost of paying compensation, the FSCS may have regard to the likely total cost of paying compensation arising out of the default, net of recoveries, not just the compensation amounts likely to be payable to particular eligible claimants covered by the proposed arrangements for continuity.

In securing continuity of a funeral plan contract:

1. (1)

   the FSCS must seek to secure the provision of a funeral for the eligible claimant under the new or continuing funeral plan contract on terms corresponding in all material respects (so far as it appears to the FSCS to be reasonable in the circumstances) to those which have applied under the funeral plan contract;

2. (2)

   if the FSCS secures continuity of a funeral plan contract other than as in (1), then the FSCS must:

   1. (a)

      give the eligible claimant the option of receiving compensation instead; and

   2. (b)

      (if the claimant does not elect to receive compensation) ensure that any future premiums that the claimant is committed to paying under the contract will be reduced by an amount (if any) that the FSCS considers reasonable to reflect the change in terms.

In order to secure continuity of funeral plan contracts, the FSCS may take such measures as it considers appropriate to:

1. (1)

   secure or facilitate the transfer of the business of the relevant person or successor that is in default and which consists of carrying out funeral plan contracts or any part of that business to another firm; and/or

2. (2)

   secure the issue of funeral plan contracts by another firm to eligible claimants in substitution for their existing contracts.

In making arrangements to secure continuity of funeral plan contracts, the FSCS must use its reasonable endeavours to seek the most cost-effective arrangements available.

1. (1)

   While the FSCS is seeking to secure continuity of funeral plan contracts, it may secure the provision of a funeral, which is due to be provided under any protected funeral plan contract of the relevant person (or, where applicable, a successor), on terms corresponding in all material respects (so far as it appears to the FSCS to be reasonable in the circumstances) to that contract.

2. (2)

   The provision of a funeral is required regardless of whether the cost of securing its provision is more or less than the cost of paying compensation.

3. (3)

   To secure the provision of a funeral, the FSCS may:

   1. (a)

      make a payment to or on behalf of the estate of an eligible claimant, or to any other person in connection with the provision of a funeral, on such terms (including any terms requiring repayment in whole or in part) and on such conditions as it thinks fit; or

   2. (b)

      secure that a payment is made to or on behalf of the estate of the eligible claimant, or to any other person in connection with the provision of a funeral, by the liquidator, administrator or provisional liquidator of the relevant person (or, where applicable, a successor), or by the trustees of any trust arrangement or insurer of any contract of insurance relating to the funeral plan contract, by giving them an indemnity covering any such payment or any class or description of such payments.