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

Documents: 29/04/2005 - SUMMARY of the EMAG (Equitable Members' Action Group) Petition to the EU Petitions Committee (29/2005)

SUMMARY of the EMAG (Equitable Members' Action Group) Petition to the EU Petitions Committee (29/2005)

"Petition about the failure of the UK government to implement the Life and Non-Life Insurance directives in the regulation of Equitable Life.''

Justification for the Petition

  • The European internal market has been created to stimulate trade and employment.
  • The European Union has recognised its collective responsibility to assist the elderly.
  • To facilitate free trade throughout the internal market, local national regulation of trade emanating from other member states had to be removed. Removal of such critical controls could only take place after member states had agreed on common standards of supervision for particular types of business.
  • In 1992 such an agreement was achieved with the EC Third Life and Non-Life directives. On the basis that these directives were claimed to have been adopted by the UK, Equitable (the world's oldest and most trusted assurance company), it was allowed to sell its retirement and savings policies throughout the internal market. This activity is termed `passporting'
  • 8 December 2000 Equitable was obliged to close to new business and soon after, on 16 July 2001, Equitable reduced total policy values for more than one million European investors by 16%, thus removing at a stroke more than 5,000m from investors' reasonable expectations.
  • The extreme financial weakness of Equitable was not visible to the public or policyholders at the time of the purchase of their investments.
  • Many aggrieved policyholders and ex-policyholders have complained to their national financial regulators but those outside the UK have been told, in accord with the directives, to address complaints to the UK regulators.
  • An authoritative comprehensive independent official inquiry carried out by senior Scottish judge, Lord Penrose, has stated that the regulators had knowingly allowed Equitable to expose policyholders to risks about which they were not told and to operate without ANY smoothing surplus, despite this being the selling feature for policies. The report revealed that the UK regulators had knowingly permitted Equitable to operate with a huge asset deficit for more than a decade.
  • In 2001 the UK new regulator that had taken over responsibility from the UK Treasury in 1999, the FSA, refused to accept that there had been any regulatory failure and refused to address any complaints about policies that had been purchased outside the UK.
  • In March 2005 the Financial Ombudsman Service (FOS) refused to study any complaints relating to a decade of weakening of Equitable's financial position on the grounds that he had discretion.
  • The UK's Treasury, in reporting Penrose's conclusions to Parliament on 8 March 2004 stated that the UK had in the 1990s a system of "light touch" regulation (contrary to European Life directives) - though this was not referred to at all in the 800 + page Penrose report.
  • 700 formal complaints were made to the UK's Parliamentary Ombudsman (PO), the Parliamentary Commissioner for Administration. This Ombudsman has made it clear that she cannot accept complaints from purchases made outside the UK. Her first report on 30 June 2003 into one case for the limited period of 1999/2000 even stated that it was purchasers' own responsibility, "caveat emptor", to ascertain the financial weakness - something that was totally impossible from any available public documents.
  • After legal action by EMAG, the PO was obliged to begin a more thorough investigation into regulation over the whole period of Equitable's financial decline. But even this investigation may only address half of the regulatory regime and may not look at the FSA. Further the findings cannot benefit any holders of policies purchased outside the UK.
  • These refusals at every level of supervisory authority in a member state deny all European complainants access to the remedies required by European Life directives.
  • The UK Courts offer no practical remedy to European policyholders, due to the huge financial costs and risks, unless they can reference a prior European court ruling ("judice prudence").
  • Policyholders from EU member states, have no alternative but to appeal to the European Parliament for action to enforce their rights under European law.

Current Situation

  • In excess of one million prudent investors across Europe, many of who are elderly, have suffered anxiety and real financial loss, unrelated to stock market movements. Those already retired have seen their retirement incomes cut by more than one third in two years, with further cuts inevitable.
  • The UK government has denied any responsibilities whatsoever for tens of thousands of policies sold outside the UK, primarily in the Republic of Ireland and Germany.
  • Confidence in insurance and retirement savings products within the internal market has suffered, resulting in a lower level of new savings in the European finance industry, with adverse consequences for retirement self-provision and for employment.


  • To recommend to the EC to take legal action through the European Court of Justice (ECJ) against the UK government for failure for a decade to implement the Third Life and Non-Life directives. This will reduce the risk of such abuses of directives in future.
  • To oblige the UK government to provide remedy to ALL European policyholders, past and present.
  • To assist the petitioners in claims to be made through UK courts (on the basis of an ECJ decision) by requesting information from the UK government (to be specified during the progress of the petition). This will help to restore confidence in European retirement insurance products.

For further information, see: www.emag.org.uk
Email: emagpr@yahoo.com