19 June '03 - Letter to John Tiner of the FSA from Alex Henney

Dear Mr. Tiner,

You may recall that in my letter of 18 November 2002 I told you that in response to my request for how surrender values and maturity values were calculated from the information on policy values which it provided on 7 May 2002, The Equitable told me:

"We do not provide details of how we arrive at surrender values. It is not a service we offer".

I referred to this episode as outrageous, and wrote to you "please would you instruct the Society to provide myself and other members with the basis of their policy values". Your unhelpful response in your letter of 10 January was gibble gabble, and avoided the request I made to you.

I am glad to say that the Financial Ombudsman Service did not take such a casual attitude as you did to other people's money, and obtained from The Equitable an explanation of the calculations, which I attach. I understand from the writer of the letter that although the computer undertakes the calculations, she had been advised that it would be expensive to programme it to print out the intermediate steps. She calculated the figures by hand, which took about 1½ hours.

One of our Committee members has noted that EMAG has been told of cases in which serious errors were made and initially denied by the Equitable, which would have been impossible if it had to explain the calculations. May I repeat on behalf of other policyholders my request that you now instruct Equitable to provide the calculations when requested. I hope you are not going to hide again behind your previously stated opinion that the Equitable is no worse than the other life assurers in this incompetent and secretive industry, and therefore that absolves the FSA from doing anything with regard to The Equitable. I draw your attention to S4(2)(b) and S5(2)(c) of the FSMA which lay upon the FSA "so far as reasonably possible", a duty of ensuring consumers have "appropriate" and "accurate" information. Knowing the basis of what a policyholder is due falls clearly within the requirements for information.

Your response to my various requests for the FSA to instruct the Equitable to provide information has been lamentable, consistent with the FSA's regulatory failures as documented in my submission to Penrose "A case study in serial regulatory failure by the government and its agent, the Financial Services Authority", and of the FSA's advice to non-GAR members to sign up to the compromise. I would be grateful if you would accept the invitation of my letter of 6 May 2003 to advise us of exactly what benefit the FSA has been to the majority of the members of the Equitable who have over the years paid for the costs of regulation.

Yours sincerely,

ALEX HENNEY

c.c. Howard Davies
EMAG Committee
EMAG website