Schedule 12: Write-down orders Part 4 – Write-down orders: financial services compensation scheme
Paragraph 4 of Schedule 12 is self-explanatory.
	Paragraph 5 of Schedule 12 inserts a new section 217ZA and section 217ZB into FSMA 2000. Section 217ZA provides that the rules underpinning the Financial Services Compensation Scheme (FSCS) must require the FSCS to provide financial assistance to protected policyholders whose entitlements reduce in value following a write-down order under section 377A. Subsection 5 of section 217ZA sets out that the financial assistance provided by the FSCS under this section must not be used for any purpose other than enabling payments to be made to protected policyholders and will not appear as an asset on the insurer’s balance sheet. Section 217ZB provides for the FSCS to have the right to recover the financial assistance provided to an insurer. The right of recovery must not be taken into account in assessing an insurer’s liabilities for the purposes of a relevant insolvency provision, as set out in paragraph 9 of Schedule 19B. This right of recovery must not be exercised against a policyholder.
	Paragraph 6 of Schedule 12 amends section 219 of FSMA 2000, setting out that the FSCS can obtain information from an insurer who has been given financial assistance under section 217ZA.
	Paragraph 7 of Schedule 12 inserts section 220A of FSMA 2000, allowing an FSCS-authorised person to inspect documents held by a write-down manager, for the purpose of assisting the FSCS to discharge its functions under sections 217ZA and 217ZB.