Policyholders take petitions to Europe - EQUITABLE LIFE:
MEPs to invite all sides to attend public meeting in September, writes Andrea Felsted.

FT MONEY By ANDREA FELSTED
-Financial Times 2 July 2005

Members of the European Parliament are to debate allegations by disgruntled Equitable Life policyholders that the UK government failed in its regulatory duties.

The parliament's petitions committee, which aims to provide redress to European citizens, is to discuss the allegations contained in petitions it has received from Arthur White, an Equitable policyholder from Kent, and the Equitable Members Action Group, an independent association of Equitable policyholders, at a public meeting in mid-September.

Representatives from the UK government, the office of the Parliamentary Ombudsman and Equitable would be invited to attend, along with White and EMAG.

The meeting would be "the first time you have got all these people... putting their cards on the table in public", says one person familiar with the situation.

Although the committee's meetings to discuss petitions are always public, only in a small number of cases are all the parties affected by a petition invited to attend. Of the 1,200 to 1,500 petitions the committee receives each year, only about 12-15 would be treated in this way.

The petition from Arthur White alleges malfeasance in office by the regulators of Equitable from 1989 to 2000. EMAG's petition alleges that the government failed to implement policy directives which would have provided greater protection for Equitable policyholders.

In January the petitions committee asked the European Commission to make a preliminary investigation into the allegations. This has now been completed and will be discussed at the September session. The ultimate outcome from the process will be a decision on whether or not European law was properly applied.

Although the European Parliament has no power to award compensation, the petitioners could use an outcome in their favour as the basis to pursue a payout.

Paul Braithwaite, general secretary of EMAG, says: "The meetings that we have had with MEPs have been extremely constructive and we have reason to believe that there is a great deal of sympathy in the European Parliament."

He says EMAG was also submitting an addendum to its petition to reflect a decision by the UK government that the outcome of a further investigation by Ann Abraham, the Parliamentary Ombudsman, into the government's regulation of Equitable, would apply to policyholders in other EU states as well as the UK. Abraham hopes to complete the inquiry by the end of this year.

The addendum would also reflect the decision by the Financial Ombudsman Service that redress of complaints following Lord Penrose's report into the overpayment of bonuses by Equitable in the late 1980s and 1990s did not fall under its remit.

The meeting comes as Equitable's legal action against 15 former directors and Ernst & Young, its former auditors, continues. A review of Equitable's strategy, including the possible sale of its Pounds 10bn closed with-profits fund, is also ongoing.