Two offshore financial centres near the UK moved to reassure non-residents with deposits in now-defunct Icelandic banks about getting compensation on up to £50,000 ($79,775).

In Guernsey, the island yesterday announced it has proposed to set up a Depositors’ Compensation Scheme with a compensation ceiling of £50,000, covering residents and non-residents. The measure will be put to lawmakers at the end of November. Previously, residents and non-residents were excluded from any protection.

In the Isle of Man, meanwhile, members of the jurisdiction’s parliament, the Tynwald, were expected to vote on a scheme to help compensate offshore savers with collapsed Icelandic bank Kaupthing, media reports said. The island is expected to spend up to £150 million, which is half its disposable income or 7.5 per cent of GDP, to part-compensate savers with Kaupthing Singer & Friedlander ( Isle of Man).

The government of the island of 81,000 people had to step in after its banks refused to foot the bill for raising the compensation limit from £15,000 to £50,000 in a law enacted a fortnight ago. However, the banks have now agreed to put up to £200 million annually into the scheme.

The actions by these jurisdictions come at a time when there had been uncertainty on whether UK residents who had put money into Icelandic bank accounts registered in The Channel Islands and the Isle of Man could be protected, or whether the protection would be quickly paid for.

In Guernsey, a group working on the introduction of a scheme has recently met for the second time. This meeting was to consider an analysis of the deposit base of all banks in Guernsey, which is essential in assessing the potential costs of any scheme, the country’s government said in a statement.

The group is chaired by Treasury and Resources Minister Charles Parkinson and includes representatives of the Commerce and Employment Department, the Guernsey Financial Services Commission and the Association of Guernsey Banks.

Mr Parkinson said: “I believe that we have made significant progress towards introducing a Depositors’ Compensation Scheme with a compensation ceiling of £50,000, as is currently the case in the UK."

It has been agreed that the proposed scheme should cover retail depositors, not companies and corporate deposits. Guernsey residents and non-residents will be covered and compensation would be due for each licensed bank. Joint account holders would both be eligible for protection.

The scheme will come into effect as soon as it is agreed by the island’s parliament but would not be retrospective, the Guernsey government said.