No new compensation cases arose for the Investor Compensation Company during the past year, according to its annual results.
The ICCL is a statutory body established under the Investor Compensation Act, 1998, to provide compensation to eligible clients of failed investment firms, where such firms are unable to return client money or investments belonging to them.
The Compensation Scheme is primarily aimed at small investors and provides compensation of up to €20,000 for each investor for claims covered.
Custom House Capital is the largest failure of an investment firm dealt with to date by The Investor Compensation Company, which has published its annual results today.
Total investor losses are estimated by the liquidator at over €61 million and compensatable losses of up to €19.7 million, which have been fully provided for in the ICCL's accounts.
The liquidation of the firm commenced in October 2011 and almost 2,000 claims for compensation were received by the ICCL from clients of the firm.
By the end of the latest financial year-end to the end of July, the ICCL had paid total compensation of €7.4 million on foot of the certification of 574 claims.
The ICCL collects annual levies from investment firms in order to build the reserves from which compensation can be paid. The ICCL does not receive any funding from the State.
The ICCL has reported a surplus for the year to 31 July 2021 of €17.3 million, an increase of €13.8 million on the previous year.
The increase was mainly attributable to receipts of risk equalisation levies. This boosted the company's accumulated reserves to €82.5 million,up from €65.2 million in 2020. The reserves included €56.6 million in the Scheme's primary fund - Fund A – which is earmarked for larger investment firms such as banks, asset managers and stockbrokers, while the second fund, Fund B, which covers smaller investment firms including insurance brokers and retail intermediaries stood at €25.9 million
The reserves are net of all projected liabilities arising from ongoing compensation cases, which have been fully provided for.
The reserves of the ICCL consist of accumulated levies collected from authorised investment firms affiliated to the Scheme.
Proposals for the next period to mid-2025 are currently the subject of consultation. Since the financial year-end, the reserves have increased to more than €87 million, reflecting levies collected in the latest funding period.
