EMAG

The independent action group for current and ex Equitable Life policyholders, funded by contributions.

Equitable Members Action Group

Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK

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Documents: 19/07/2004 - The Parliamentary Ombudsman Press Notice 19 July '04

The Parliamentary Ombudsman Press Notice 19 July '04
Ombudsman decides on further investigation into the prudential regulation of Equitable Life

The Parliamentary Ombudsman, Ann Abraham, has announced her decision today, Monday 19 July, that she will conduct a further investigation into the prudential1 regulation of Equitable Life.

The Ombudsman had agreed to give further consideration to the position following publication of the Penrose report and the response of the Government to that report. In a special report to Parliament, the Ombudsman sets out her decision and the reasons for it. Her decision follows an extensive consultation exercise initiated by Ms Abraham in April to gather the views of interested parties to inform her decision.

"The concerns surrounding the prudential regulation of Equitable Life remain despite the publication of the Penrose Report and the Government's response to it," said Ann Abraham. "I took the view that I should consider whether a new investigation by my Office was justified as Lord Penrose did not deal with questions of maladministration2 or redress. I also took the view that my decision on whether to investigate and, if so, over what time period and in relation to which matters should be informed by a wide range of views, including those of policyholders and their representatives, MPs, the regulators and Equitable Life itself. That is why I conducted the consultation exercise, to which, in all, I received approximately 2,000 responses.

"Having considered carefully all of the representations I received, I have decided to conduct a statutory investigation of the prudential regulation of Equitable Life in the period prior to 2 December 2001.

"In reaching my decision to investigate, I have applied the same criteria as I would to any complaint received by my Office. Are the bodies complained about within my jurisdiction? Is there some evidence of maladministration? Might any such maladministration (if established) have caused an injustice that has not been put right? Would I be able to produce a worthwhile outcome if I investigated and found maladministration causing injustice? I am satisfied that all those criteria have been met and I explain why in my report."

In her report, the Ombudsman makes clear the scope of her jurisdiction. She has also asked the Government to bring the Government Actuary's Department (GAD) into her jurisdiction so that she is able to assess GAD's role in the prudential regulation of Equitable.

"I consider that there is sufficient initial evidence to suggest that the actions of GAD are key to an assessment of whether maladministration by the prudential regulators caused an injustice to complainants that has not been put right. I believe therefore that GAD's actions must be brought within my jurisdiction", said Ann Abraham.

The investigation will cover the actions of government departments responsible for the prudential regulation of Equitable Life but not concerns around the management of Equitable Life itself or complaints about the alleged mis-selling of its policies, neither of which are within the Ombudsman's remit.

"My aim is to be as transparent and flexible as possible in the conduct of this investigation," said Ann Abraham. "The law requires me to conduct my investigations in private but I will consider how much background information and other evidence I am able to publish."

MPs and policyholder representative groups will be consulted on the selection of lead complainants to ensure there is proper representation of the principal classes of policyholders. All interested parties will be informed of the process for conducting the investigation, once it has been determined.

The Ombudsman is also concerned to ensure that the investigation is completed within a reasonable timescale.

"I am conscious that significant numbers of people - many of them elderly - may be in difficult financial circumstances now and will want my investigation concluded as speedily as possible. I will aim to do just that without jeopardising the robustness of my approach, subject to the need to be fair to all parties," said Ann Abraham.

"Above all else I will remain impartial and independent. I am neither an advocate for complainants nor an apologist for those whose actions are under investigation."

The Ombudsman's Office will begin preparations for the investigation immediately.