Which organisation will become involved if an insurance company is unable to pay its claims?

The Financial Services Compensation Scheme (FSCS) is the correct organization to become involved when an insurance company is unable to pay its claims. The FSCS is the UK’s statutory fund of last resort for customers of financial services firms that are unable to meet their obligations, including insurers. This organization provides compensation to policyholders when an insurance company goes bankrupt or faces financial difficulties, ensuring that customers are protected and that they can claim financial compensation for their losses. By serving as a safety net, the FSCS helps to maintain confidence in the financial system and ensures that consumers are not left without support in the event of an insurer's insolvency.

In contrast, the Financial Ombudsman Service (FOS) resolves disputes between consumers and financial services firms, but it does not compensate for claims when an insurer fails. The Prudential Regulation Authority (PRA) focuses on the safety and soundness of financial firms and does not handle claims directly. The Financial Conduct Authority (FCA) regulates the conduct of financial firms to ensure they operate honestly and transparently but plays no direct role in compensation for claims in the event of an insurer’s failure. Each of these other organizations has distinct functions that do not encompass the role of compensating consumers when an insurer can no longer