Safeguarding through insurance – how it works and what’s changing under the FCA’s 2026 Regime
Key takeaways
- When a firm becomes insolvent, it’s relevant funds (if properly safeguarded) become available for return to payment service users and e-money holders in priority to the claims of all other creditors.
- Safeguarding can be performed through either segregation or through insurance (or comparable guarantee).
- The option to safeguard through insurance has been available since the regulations were introduced.
Safeguarding through insurance – how it works and what’s changing under the FCA’s 2026 Regime Douglas Blakey Tue, June 2, 2026 at 7:41 PM GMT+7 5 min read Why payment firms are turning to insurance for safeguarding Safeguarding is the key mechanism within the Payment Services Regulations (PSRs) and Electronic Money Regulations (EMRs) to protect relevant funds. When a firm becomes insolvent, it’s relevant funds (if properly safeguarded) become available for return to payment service users and e-money holders in priority to the claims of all other creditors.
Safeguarding can be performed through either segregation or through insurance (or comparable guarantee).
The option to safeguard through insurance has been available since the regulations were introduced. Whilst safeguarding through segregation remains the most commonly used safeguarding method by firms, the use of safeguarding through insurance is increasing.