28 October '03 - Minutes of the 3rd AGM of EMAG

1. The Minutes of the last AGM, held on 5th June 2002, and subsequently circulated to members, were accepted without dissent.
   
   
2. The annual accounts for 2002, circulated to members in May, were approved without dissent.
   
   
3. The officers and members of the committee were presented, and re-elected unopposed.
   
   
4. No changes to the rules were proposed.
   
   
5. Paul Braithwaite reported on progress since mid-September, when the Chairman had last reported to members in writing. He said that the EMAG web site, normally up-dated every Wednesday, is the best method of communication with members, but of course not all members had ready access to the Internet.
   
   The report by Lord Penrose has yet to be published, and meanwhile EMAG is preparing to challenge the badly flawed report of the Parliamentary Ombudsman by means of an application for Judicial Review. As a preliminary EMAG has submitted its arguments to The PO, and is happy to report that - contrary to her report - she will now consider extending her enquiries to the period prior to 1999 in the light of the Penrose report. He reminded members that the declared aim of the Penrose report is "to learn lessons for the future", whereas the sole role of the PO is to investigate maladministration and - where appropriate - to recommend compensation.
   
   PB said that EMAG's arguments for JR are very strong, notably those relating to the Government Actuaries' Department (which the PO has refused to investigate, despite its key role in regulating ELAS) and to the so-called "light touch" regulatory regime, accepted by the PO but with no foundation in the 1982 Insurance Companies Act.
   
   PB also said that the committee has spent EMAG's funds as frugally as possible, with much preliminary work on the JR claim being undertaken by committee members. However if EMAG is given leave to proceed the committee will need to ask members to help replenish the funds.
   
   PB and other committee members responded to various questions:
   1. Is the committee postponing legal action against the PO until the Penrose report is published ? No - we don't know how soon the report will be published. Our claim against the PO is very strong, and we will decide when and how to proceed after the PO responds to our submission to her.
   2. Has the Ombudsman had sight of Lord Penrose's report ? No - Lord P's enquiry is part of the Treasury, enabling him to see all relevant documents, but only in confidence. We are sure that there has been neither access nor dialogue between him and the PO.
   3. Are any MPs members of EMAG ? Not that we are aware.
   4. Is it possible to brief members of the Treasury Select Committee before they question the PO on 27th November ? We have sent them a background paper that we have prepared. One MP has asked PB for an oral briefing, and we will offer the same to all the other members.
   5. How else can we influence MPs ? We have been very active working with MPs, both those in the two relevant Select Committees (Public Administration, & Treasury) and others. Many members of all parties have signed the Early Day Motions that we have encouraged. Conservatives and Liberal Democrats have been most vocal in supporting us, and we hope for more support from Labour, in view of the damage being done to the government's policy on encouraging personal pensions, and with the next general election within 18 months.
   
   
   
6. Leslie Seymour reported on his extensive and productive researches into the prospects for obtaining compensation for losses by recourse to institutions of the European Union. It will be preferable if any compensation due because of malad-ministration is paid without recourse to the law, and if recourse is needed it would be preferable if that could be obtained at reasonable cost and time within the UK. But if not there is definitely scope to appeal to EU powers - either to the Commission itself (faster and cheaper), or to the European Court of Justice. There is clear precedent for this. The 3rd Life and Non-Life Directive, issued in 1992, stipulates that regulators must have regard not only to the insolvency of life assurance companies, but also to the internal management of the companies and the mathematical rigour of their calculations.
   
   In response to questions LS explained that it would not be practicable to approach both the High Court in London and the EU Commission at the same time. And a rejection from the EU would preclude an approach to the High Court. If the Court of Justice decided that there had been maladministration it could order compensation; whereas a similar decision by the Commission would not imply an automatic right to compensation.
   
   
7. Questions, comments and discussion covered a range of points, including (with comments from committee members in brackets):
   
   Is liquidation possible for ELAS ? (Apparently it's not permitted in the Articles of Association). What about insolvency ? (Very unlikely, since ELAS can continue to draw on the WP fund in order to remain insolvent. And other insurance companies will fight against bailing ELAS out). Is there a major newspaper expose in the offing? (We are not aware of any major investigation by a journalist). Can Lord Penrose himself publish the evidence presented to him. (No, he is reporting exclusively to the Treasury). What is the relationship between EMAG and the ELAS board ? (No formal relationship, and not close). What if the Penrose report is held up indefinitely? (We will lobby MPs for all we are worth).
   
   What are EMAG's current objectives and strategy ? (Essentially the same as shown on the web site, although we intend to rephrase the objectives to make them clearer, and more consistent with the Articles of Association; and we will probably drop the formal, and therefore rather inflexible, declaration of strategy from the web site).
   
   One member who expressed appreciation of the time and effort spent by the committee was roundly applauded.
   
   Following the conclusion of the formal business two members - Stewart Simpson ("Mr P" of the Ombudsman's report), and Sir Gordon Downie, former head of the PIA - spoke on different aspects of the report. (Both papers are now also on the EMAG web site).

Chris Carnaghan and Paul Braithwaite
11th June, 2004