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

Correspondence: 12/05/2004 - See ELAS's letter to MPs

House of Commons
Wednesday 12 May 2004

Dear Mr XXXX MP,

Proposed Extension of the Inquiry of the Parliamentary Ombudsman into the prudential regulation of the Equitable Life Assurance Society.

Following the recent letter sent by the Parliamentary Ombudsman to MPs, and advertisements in the National Press, I thought that this might be an appropriate time to briefly restate the views of the current Board of the Society on the case for a resolution of this now long running matter.

Quite simply, we feel that the Parliamentary Ombudsman should re-open her inquiry into the prudential regulation of Equitable Life. This further inquiry should include both a widening of her original terms of reference and timescale to include the role played by the Government Actuaries Department (GAD) in the regulation of Equitable Life.

The GAD successively advised the Department of Trade and Industry (DTI) and the Treasury (the "regulators") when those departments were responsible for the prudent regulation of the Society before the Financial Services Authority (FSA) took over in 2001. Lord Penrose heavily criticised the role that the GAD played in his report (8 March 2004) into the events that had occurred at the Society. The criticism which he made pointed to poor regulation of the Society. Specifically GAD recognised in 1972 that it had an audit role to carry out if regulation was to function effectively (see Penrose Chapter 11 paragraph 24 on page 363). It seems clear from the report that it failed in this task.

The current board feels that, in the interests of natural justice for our policyholders, there must be a fast and fair resolution to this situation leading to final closure for all those involved in the affair. We feel that fair closure includes compensating those that lost money due to the action or inaction of the regulators and their advisers, who played a fundamental part in the poor regulation of the Society.

We understand that in order to allow the Parliamentary Ombudsman to look into the role of the GAD in the regulation of Equitable Life, she would need to have the original Act that governs her role and responsibilities (Parliamentary Ombudsman Act 1967) amended by a simple piece of secondary legislation. The current Board believes that this piece of secondary legislation should swiftly be brought forward and approved by Parliament

The current board also believes that the Parliamentary Ombudsman should seek and be offered the full assistance of Lord Penrose in her own further inquiry.

I will be meeting with the Parliamentary Ombudsman later this month and will assure her of my Board's full co-operation should she choose to re-open her inquiry.

We hope that her report will provide the final closure to this case and that current and former policyholders of Equitable Life can get on with better lives.

Yours sincerely,

Vanni Treves
Chairman, The Equitable Life Assurance Society.