VINCENT NOLAN

Process Facilitation and Coaching

Dear Sir

"Equitable offer is held up by probe"

Richard Dyson's article under the above headline states, incorrectly, that "the (Warren) report was commissioned by watchdog the Financial Services Authority". It was in fact commissioned, reluctantly, by the old Equitable board, under pressure from the Equitable Members Action Group. It was welcomed by the current Chairman, who extended the terms of reference to cover the issue of mis-selling of non-guaranteed policies

At no time has the so-called watchdog done anything to protect the interests of policyholders. Having pointed out to Equitable that their reserves were inadequate to cover possible guaranteed annuity liabilities, they failed to ensure that adequate reserves were provided. They then colluded with the old Board in its disastrous policy of trying to sell the business and allowed the Society to continue selling new policies during this period - a clear case of mis-selling. They 'welcomed' the misguided sale of operational assets to the Halifax, resulting in higher costs of investment management and administration for policyholders.

Most recently, they are reported to have allowed the Society to include £1 billion of future profits as current assets (which is apparently permissible under the insurance regulations, but has not previously been attempted on this scale, to my knowledge)

There is currently an inquiry into the FSA's performance in relation to Equitable, but is being conducted by the FSA itself - a sure recipe for a whitewash. It is time for the Government to accept responsibility for the failure of the regulatory process and at least guarantee the Equitable with-profits fund against insolvency. This would bring some much-needed stability into the situation and ensure that policyholders do not suffer further from Equitable's mismanagement

Yours faithfully

Vincent Nolan