 |
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 |
|
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: 12/02/2001 - EMAG Meeting with FSA 12th February 2001 - EMAG Meeting with FSAFor the FSAMichael Foot - MD Martin Roberts - Insurance Co Division Roger Alan - Head of Insurance Co Division Andrew Whittaker - General Counsel Vernon Everitt - PR FOR EMAG Vincent Nolan David Browning Alex Henney Adrian Howard-Jones Colin Slater Regulatory Approval The Halifax deal itself did not need regulatory approval in UK, although some minor parts did. Some sort of approval was required in Germany and this was what was referred to in press release. Power of Board to Sell EMAG pointed out that most of the board had announced their intention to go. The firm of one of the non-executives was acting for the purchaser. The CE has not yet received FSA approval to his appointment. He also seems to have been offered a job in the purchaser. Members are not to be consulted. Whilst FSA accepted the situation was unusual and unfortunate, they were not responsible for running the company. Their power to intervene could only be exercised if the business was being run 'without due regard for policyholders interests'. FSA judgement was that the Halifax deal was the 'best deal available', indeed the only one. They had not liked the GE proposal. They thought it was in the best interests of the policyholders to go ahead. It produced up to £1,000 million towards the GAR settlement. They repeated Chris Headdon's line that the directors had a duty to sell, because the business was a depreciating asset and if they did not sell quickly there would be nothing to sell. EMAG said that it looked like undue haste to us. Perhaps they were under political pressure to settle the matter quickly. They answered that that was not the case. They knew their actions would be under intense scrutiny and it was not plausible that they would try to bodge things up. Pending Counsels Opinion/ 'Unfair selling' of Non-GAR policies Adrian Howard-Jones went through the issues at stake to be considered by Nicholas Warren QC. Did these fundamental matters indicate that the deal should be slowed down? The FSA reaction was that these issues were interesting, but cut no more ice that those set out above in the context of the deal. It would not wait while legal issues were resolved. What has been sold? Colin Slater summarised what Chris Headdon and James Crosby had told EMAG. Halifax had not bought the old company nor the £25bn W-P fund. They had only bought the operating assets. Members' approval was not needed. Did that mean that if the GAR problem were solved we (the owners) could re-open the Old Equitable for new business? Could we sell it to (say) Prudential? Martin Roberts seemed to think the answer to both questions was 'yes'. But his legal adviser told him the FSA could not answer questions on the terms of the deal. Role of FSA in capping deal They would expect to be involved and would welcome our comments. They expected to be consulted by the Court in the event of any deal reaching that stage. General Approach of FSA The FSA position was regulatory. They could not run the business. They could not force a vote. They could only stop a deal if, in their view, that was needed to protect policyholders' interests. They saw the Halifax as the last credible purchaser. It was clear they did not want to create delay in case the Halifax deal went off. They were immensely relieved that someone had 'bought' the Equitable, even if the price was poor and the deal rotten. |
