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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Best Media Stories: 16/03/2010 - The Times: EMAG shuns 'The Chadwick Process'

Treasury accused of sham review into Equitable payouts

The action group representing Equitable Life policyholders accused the Treasury of a 'stitch-up' last night.

Equitable Members’ Action Group, which represents 25,000 policyholders, some of whom lost their life savings during the society’s near-collapse a decade ago, has withdrawn its support for a Treasury-commissioned review into compensation payments.

Instead of co-operating with Sir John Chadwick, who was commissioned in January last year to explore payments for policyholders 'disproportionately' hit by Equitable’s financial troubles, the group said that it would campaign for a full compensation fund to be established.

This was the recommendation of the Parliamentary Ombudsman Ann Abraham, whose report into Equitable in 2008 accused the Government and regulators of a 'decade of regulatory failure' and found them guilty on ten counts of maladministration. The Government, as requested by Ms Abraham, has apologised to policyholders but has accepted only four of the ten counts.

More than a million policyholders lost an estimated £4 billion between them when Equitable, Europe’s oldest mutual, was forced to close to new business. The action was prompted by a ruling in the House of Lords in 2000 that it must honour its financial liabilities to customers holding guaranteed annuity policies. As a consequence Equitable faced liabilities of £1.5 billion, prompting a collapse in policy values. Critics, including Ms Abraham, argued that the society’s problems should have been spotted years before the Lords ruling.

Ms Abraham called in her report for a compensation fund to be set up by the end of that year.

Paul Braithwaite, general secretary of the Equitable Members’ Action Group, told The Times last night that Sir John’s review, the conclusions of which are due in May, was a Treasury 'sham' that was being controlled by civil servants.

Mr Braithwaite said that the Treasury was using the review to 'retry the case' of Equitable and attempt to deny any obligations to make good policyholders’ losses.

Rather than the billions that they were due, policyholders were likely to end up with 'only several hundred millions', he said. The action group’s campaign will focus on existing and prospective MPs, many of whom have numerous constituents who hold worthless Equitable policies, he said.

The Treasury did not return calls seeking comment last night. The Government has argued that Equitable should bear the brunt of the blame.