Minutes of EMAG committee meeting, 6^th December 2001

Held at: the RAC Clubhouse, Pall Mall, London

Present: Paul Braithwaite, Alex Henney, Tom Lake, Colin Slater, Adrian Howard-Jones, Rodney Allen (Committee) Leslie Seymour (International Member), Andrew Pike, Alan Wilson, Nicholas Oglethorpe, (Members), Prof David Blake (after 8.30pm)

Apologies: Betty McCann, Margaret Felgate, David Browning, Jeremy Lever

1. Minutes
   
   The Minutes of the meeting held on 8^th October were approved.

2. Chairman's Review
   
   Meeting of Action Groups with John Tiner of FSA, Drawdown, EMAG, Liz Kwantes for ELMHG, Stuart Bayliss for GAR, Nicholas Oglethorpe (Annuitants)
   
   Stuart Bayliss spent some time explaining that those members put into `negative equity' by the 16th July cuts had been illegally treated. Adrian Howard-Jones has been corresponding vigorously with the FSA on this matter.
   
   Adrian Howard-Jones' GIR complaint is still with the Pensions Ombudsman, and the Society is currently questioning the jurisdiction of the Ombudsman.
   
   Correspondence with John Tiner - who will outline what FSA would do if compromise fails - and also expects the `Independent Actuary' brief to be made available with the compromise package. (Actually the brief is available only for inspection at Lovell's office).
   
   Paul Braithwaite had briefed Christopher Chope before the Adjournment debate - who also intimated that the Parliamentary Ombudsman's office was understaffed and would not be able to report before Penrose in any case.
   
   Treasury is consulting on administration for insurers as an alternative to winding-up - see out web page.
   
   Adrian Howard-Jones asked how the Society could have reformed its former management approach and installed checks and balances with just one executive director and a handful of employees.
   
   PB had attended and reported on Mr Justice Lloyd's first court hearing in relation to the Compromise Scheme.

3. Treasury Select Committee meet 3 times since last committee meeting and EMAG had sent auditors on each occasion. Our submissions were constructed by David Browning - thanks. We also submitted Paul Braithwaite's letter to John Tiner on the compromise process.
   
   FSA's reponse to minister Ruth Kelly on the Baird report is now available - will be on website.

4. Tom Lake had raised the question of whether to publish information identifying legal action groups of ex-members planning action against the Society, this being apparently contrary to our objectives. Adrian Howard-Jones objected, since obtaining information for our members was our primary function. There was animated discussion, then a vote not to identify the groups publicly.

5. Alex Henney introduced Prof David Blake's review of the Society's position. Fees were agreed. There was a discussion on the brief. Nicholas Oglethorpe pointed out that a clear statement of the brief in the report - indicating that a truly objective assessment had been sought - this would enhance the group's reputation.
   
   Part 35 rules should be adopted - written as if for a judge by an expert witness.
   
   Lack of data should also be highlighted.
   
   The report would appear on 17th December and publicity would be arranged - it would be widely available and publicised.
   
   Prof Blake explained that his background was as a financial economist, and particularly that he had no legal training.

6. Leslie Seymour introduced the work of the international group. In Europe the Equitable was only approved in the UK and in Germany. In other countries the sale was under the EU freedom of financial services act. Remedy would be for the national public prosecutor to sue the Society.
   
   Protection for unit-linked policies - the separate funds of a life office are ring-fenced according to the FSA. In the event of insolvency the barriers fall away as the companies' liabilities have to be met by composition with its creditors.
   
   Leslie Seymour was now pursuing different regulators to see who was responsible in terms of the different stages of the life of a policy.
   
   A letter sent by the Society to international policyholders was shown in which it was stated that international policyholders would not be affected by the outcome of the House of Lords appeal.

7. It was proposed by Colin Slater that EMAG should express a recommendation on the compromise. Alex proposed that the different opinions be displayed on the web page.

Meeting closed at 9.30pm.

Next meeting 23 January 2002, RAC Clubhouse, Pall Mall, London (Jackets and ties for gentlemen).

Tom Lake 22nd January 2002