Minutes of EMAG committee meeting, 3rd September 2001

Held at: the RAC Clubhouse, Pall Mall, London

Present: Paul Braithwaite, Betty McCann, Alex Henney, Tom Lake, Colin Slater (Committee) David Browning, Vincent Nolan (Members)

Apologies: Margaret Felgate, Adrian Howard-Jones

1. Minutes
   
   The Minutes of the meeting held on July 17th. were approved.

2. Chairman's Review
   
   This was distributed before the meetings; main points are included here.

   1. ELMHG chair Liz Kwantes had initiated the meeting between Action Groups and the Board. Chair Paul Braithwaite welcomed the opportunity to put EMAG's approach directly to the Board, prior to finalisation of compromise proposal.

   2. EMAG letter delivered by PB 6th August to Gordon Brown at Downing Street along with Vincent Cable's letter on the FSA report.

   3. EMAG had consderable press exposure in July and August for our principled approach.

   4. We have not succeeded in obtaining for members the contents of the comprehensive Financial Review. As members are the owners of the the Society EMAG holds the conviction that we are entitled to know the financial content and continue to use all means to press for publication.

   5. The Society is now using a new PR company, Burson-Marsteller, which hopefully should be an improvement.

   6. There has been much dialogue within the committee as to whether we should accept information in confidence - see item below.

   7. The Board has now stated officially that there will be something in the compromise for nonGAR policyholders.

3. Warren II publication The committee agreed that it was politic to welcome publication of Warren II simultaneously with the compromise proposal. A flood of mis-selling complaints in September prior to the compromise would just further jam the Society's bureaucracy, when many such should be avoided by the contents of the compromise proposal.

4. Position of Annuitants Rodney Allen (first committee meeting attended) outlined the position of the with-profits annuitants. Those who took the option of a major profit-dependent component are particularly hard hit. Some flexibility on their terms could be very helpful. EMAG has suggested that the Board should consider annuitants (and internationals) as a separate class. Rodney undertook to investigate the legal position. CS noted that Section 425 of the Companies Act under which the compromise is proposed allows for a `totally clean sheet of paper'. So the settlement proposal is not constrained except by the need to gain the members votes.
5. Treasurer's Report 126 new members (12 international) since the EMAG AGM. Finances are: £ 3942 (current) £ 6021 (deposit)
   
   The PO box has been moved, advertised and letters are arriving.
6. Advice to Members re Compromise The following motion was approved:
   "The committee of EMAG restates that it has never been our policy to advise members on their personal decisions. EMAG has always sought out information to facilitate more informed personal decisions by policyholders.
   However, the committee endorses the view that the achievement of a fair and just compromise would provide the Society with much needed stability and should lead to better future bonus prospects."
   
   Several members undertook to sound out relevant professionals on the possibility of having a professional review of the compromise to distribute to EMAG members.
   
   
7. Disposition to Confidential Information The following was discussed and approved nem con, but Margaret Felgate in absentia, wished her dissent to be noted.
   
   "Whilst it is EMAG's policy to maximise the information from Equitable for policyholders and we are opposed to receiving information in confidence, the committee recognises exceptional circumstance may warrant variance.
   The committee authorises the use of discretion when the individual committee member judges that the acceptance will be in EMAG's best interest, but wherever possible will seek prior committee approval."
   
   PB has been invited to a second meeting with the AGs and the Board to view the compromise and, as public spokesman for the group, it would help him to have prior sight to absorb it before publication . After discussion, the committee supported this view, given reasonable arrangements for the meeting.
   
   
8. Penrose Inquiry and Other Government-related Action The inquiry's remit is "to look at lessons for the industry". The Treasury will receive the report and decide what can be published. The use of the word "independent" seems inappropriate, as the Treasury itself is under scrutiny.
   
   Members are believed to be leaving in significant numbers (e.g. see Bacon Woodrow report linked from web page). Sir Gordon Downey (former Parliamentary Standards Commissioner) is saying that the Parliamentary Ombudsman is the man who could do something truly independent.
   
   The committee supported an energetic approach via members' MPs to the Ombudsman as initiated by Liz Kwantes of ELMHG (see web page).
   
   
9. Letter to the Non-Executive Directors A draft of a constructive letter by CS to ELAS's non-executive Directors was applauded. PB,AH, and VN undertook to delp edit a revised version.
   
   
10. Financial Information The meeting asked AH to write to Michael Foot at the FSA on the provision of the Financial Review information, the issue of governance at the Equitable to reflect its mutual status, and the development of an FSA interim code of conduct for mutual societies in advance of the Sandler Review.
    
    
11. Membership Drive TL to develop a proposal. depending on availability of volunteers. To that end produce a newletter, also asking for contributions to an independent evaluation of the compromise proposal ASAP.
    
    
12. Possible Parliamentary Debate Scottish Nationalist have asked for briefing as they are pushing the Equitable affair in their parliamentary time. Paul Braithwaite will be briefing Michael Weir MP.
    
    
13. Offer for EMAG concession on GAR Software Offer from Ronnie Sloan for concession on his GAR uplift valuation package was considered. The offer rejected with thanks, as we are careful to avoid ANY commercial links.
    
    
14. Unitisation The committee voted in favour of "unitisation" of the fund. This would hugely increase transparency and would replace the impracticability of a smoothed with-profits fund post the possible YES vote. The committee agreed to press strongly for unitisation during the compromise consultation period.
    
    
15. Keep up the pressure on MPs Members should keep up the pressure on their MPs and be encouraged to write to them (again) to request the involvement of the Parliamentary Ombudsman (per above). Also the forthcoming party conferences present an opportunity to lobby.
    
    

Meeting closed at 9.30pm.

Next meeting 8th October, at RAC Clubhouse, Pall Mall, London .



Tom Lake 11th September 2001