How the scheme is funded

General

Funding of the compensation scheme is by contributions from firms which are authorised to conduct investment and/or insurance services.  For details on the categories of firms which fall within the scope of the Scheme, please click here.  The method of calculating the contribution payable was decided following five extensive processes of consultation with firms and industry representative groups (1999, 2001, 2004, 2007 and 2010). The funding arrangements for the period 1 August 2010 to 31 July 2013 were published in June 2010.

The contribution rate varies depending on the nature of the investment services provided and in certain situations, on the number of clients being provided with services by the firm. Where a product producer appoints another firm to act as its agent, the appointing firm may, in certain circumstances, be obliged to reimburse compensation paid by the ICCL if the appointee firm fails.

Section 25 of the Investor Compensation Act provides that the Central Bank of Ireland may authorise the establishment of compensation schemes by professional bodies representing accountants. Such schemes would be independent of the ICCL and would be the provider of compensation in respect of the failure of members of the relevant professional body. However, to date, no such authorisation has been granted.

Click here to download funding arrangements paper June 2010.