The Financial Services Compensation Scheme (FSCS) has been set up to provide protection to consumers in the event of an authorised financial services firm, such as MetLife Europe d.a.c. (MetLife), being unable to meet the financial claims being made against it.
It is important that you note that the cover the FSCS provides will depend on the type of investment that you hold, and that in some circumstances you would be unable to make a claim under the scheme.
MetLife, as an insurer, is covered by the FSCS in respect of long term insurance business, which includes life assurance and pensions. If it becomes unable to meet the financial claims being made against it, you may be entitled to compensation from the Scheme. The maximum level of compensation for claims against insurers declared in default is 100% of the claim with no upper limit.
All investment funds offered by MetLife ultimately invest in a fund managed by an external fund manager. These funds are often referred to as a ‘mirror fund’.
When you make an investment with MetLife you are buying units in the MetLife ‘mirror fund’ and not the external fund its self. The investment in the external fund is made by MetLife.
If the external fund manager or company were unable to meet their financial obligations, no claim could be made under the FSCS.
It should be noted that it is a requirement of a fund manager to appoint a custodian that holds customers' securities for safekeeping in order to minimize the risk of their theft or loss. Since they are responsible for the safety of assets and securities that may be worth hundreds of millions or even billions of pounds, custodians generally tend to be large and reputable firms.
For further information see www.fscs.org.uk or telephone 0800 678 1100.