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: 13/12/2002 - Letter to Howard Davies of the FSA

13 December '02 - Letter to Howard Davies of the FSA from Alex Henny
To view the original letter, to which this is a response, please click here

Dear Howard,

Although I had what I hope was a useful discussion with Mr. Strachan, I regret you did not telephone. I wanted to ask why you thought I was being unfair. I believe that many members of the Equitable consider they have been treated unfairly by regulators past and present in whom they implicitly placed their trust. And they have paid dearly for that unfairness.

I did send a further letter to Mr. Tiner the day before yesterday and attach a copy. It demonstrates the complete disinterest that Charles Thomson has in providing members with information about the finances of the Society. To partially offset the Society's policy of obfuscation we commissioned Ned Cazalet and Burgess Hodson to explain to members the financial state of the Society. If the Society complied with all the FSA's good words of intent, and if the FSA had been doing its job for members, we would not have needed to commission the reports.

To recapitulate, EMAG calls on the FSA to:-

  • instruct the Society to provide adequate and comprehensible information about the Society's financial situation as per the clear intent of various FSA documents (and also as per Article 75 of the Society's Articles of Association) to the members and their professional advisers, so that they are in a position to:-
    • judge the stewardship of their money in (supposedly) their mutual
    • make an informed decision about the future of their money
  • instruct the Society to provide members with an explanation of the basis of the calculation of the surrender and maturity values of their policies. Thus far the FSA has refused to help members on this issue
  • instruct the Society to explain the rationale for the MVA, especially for those who could take a contracted exit. I am sure that the consequence of the MVA is to force some who wish to leave into a draw down when they would rather continue contributing to a pension
  • instruct the Society to undertake a thorough study of the feasibility of unit linking the fund and to publish a reasoned analysis of the work (as Charles Thomson promised Sir Jeremy Lever QC)
  • instruct the Society to publish the number of its members
  • the FSA's "Progress Report: The Future Regulation of Insurance" states:-

    "Consumer and investor confidence in the management of insurance firms has been affected by instances of mis-selling, most notably of personal pensions, and by high profile cases such as Equitable Life and Independent Insurance. These cases have highlighted, among other things, the need for effective corporate governance and systems and controls in both life and general insurers."

In conformance with these fine words, we ask the FSA to instruct the Society to modernise its governance to radically improve the democratic accountability of the Board to the members. I attach the proposals which EMAG made. The Board's recent review of the articles dealt with trivial issues about spill-over rooms for general meetings and video conferenced board meetings, but entirely (and intentionally) ignored the major issues of governance in order that this floundering Board can protect itself from effective challenge. In doing this it ignored a petition by 16,179 members asking for changes to the arrangements for calling EGMs and putting resolutions to meetings.

As I made clear to you and your colleagues, we are not aware of anything which the FSA has done for incumbent members . We ask you to change your approach.

I wish you well at the LSE - when I spent some part-time there the grey spirits of Sydney and Beatrice hung over the place.

Yours sincerely,


c.c. Mr. J. Tiner, Mr. D. Strachan, EMAG Committee, EMAG website.