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

Media Stories: 27/02/2006 - The PO announces to all MPs a long delay of PO 2 report.

Watchdog's Equitable Life report delayed again

  • Explosive facts holding up inquiry, say campaigners
  • Government 'insisting on more time to respond'

Rupert Jones
Monday February 27, 2006
The Guardian


A parliamentary watchdog's long-awaited report into what went wrong at Equitable Life and whether government departments were at fault, has been delayed and is unlikely to appear until October at the earliest. Campaigners said long-suffering policyholders would be "bitterly disappointed" to learn of the delay. The Parliamentary Ombudsman's report is regarded by many as the best remaining hope for government compensation, more than five years after Equitable closed its doors to new business.

The ombudsman, Ann Abraham, announced in July 2004 that she was reopening her inquiry into the near collapse of the world's oldest mutual insurer. It is looking at whether policyholders were caused an injustice as a result of maladministration by regulators, and what form any redress should take. Ms Abraham's office has been investigating 18 accusations of regulatory failure. She originally indicated she would complete her investigation before the end of last year, and in October she said the report was due to be published by the spring of 2006. But she has now written to MPs to tell them this had not proved possible. The report would not appear before the summer parliamentary recess, and she would only say she expected to lay it before parliament before the end of 2006.

Campaigners claim the delay is linked to demands by the government for more time to respond to potentially explosive new information uncovered by the inquiry team. A spokesman for the 15,000- strong Equitable Members' Action Group (EMAG) said it understood the investigation had revealed "vital new evidence not accessible to the general public that is of such significance that it should be incorporated, but the government is insisting it must have much more time to respond". Equitable Life shut its doors to new customers in 2000 and later repeatedly slashed the value of a million policyholders' investments after it lost a legal battle involving guaranteed annuity rates, sold as part of pension plans.

The official Penrose report into the debacle revealed that Equitable's former management had engaged in dubious financial practices, but also highlighted a number of failures by regulators, which over the years have included the Treasury, the Department of Trade and Industry and the Financial Services Authority.

Five of Lord Penrose's 11 main findings implicated government departments in failings that led to Equitable Life's near-demise. Ministers have firmly resisted calls to compensate victims. Campaigners have pressed for an official bail-out, and the European parliament recently launched a formal investigation into the government's role in what went wrong. Last week, the committee of inquiry, made up of 22 MEPs, said it would be questioning government officials.

Paul Braithwaite, general secretary of EMAG, said his organisation was "exasperated at being parried at every turn by the British establishment". "It's delay after delay after delay - presumably until we're all dead or gone away. Nevertheless, EMAG continues to believe that, in the end and thanks to a combination of the parliamentary ombudsman and the European Union, justice will prevail."