He will take up his appointment on 1 April for three years, succeeding David Hall CBE. Mr Churchill is currently chairman of the National Employers Savings Trust and former chief executive of UK, Irish and International Life at Zurich Financial.
He said: “A huge increase in claims and compensation paid out in more recent years has created significant challenges for the FSCS and has impacted on all of its stakeholders.
“The FSCS will continue to play a vital role in providing confidence in the financial services sector this year and onwards.”
Lord Turner, chairman of the FSA, said: “I am delighted Lawrence has agreed to serve as FSCS chairman. He will bring an invaluable set of skills and knowledge from his varied experience in the financial services sector over many years.
“David has made a significant contribution to the FSCS and financial services since he was appointed chairman over six years ago. He played an important role in navigating the FSCS through many great challenges and unchartered territory. We wish him well for the future.”
The FSCS announced last week it had begun the first stages of claims for customers with MF Global.
Private customers with individual accounts are expected to receive a claim form by 23 January.