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


News - 2001

  • 29/12/2001 - An article in the Financial Times

    An article in the Financial Times of outlines numerous cases of alleged mis-selling of income drawdown policies. Alan Steel - a Scottish IFA has passed his dossier to Lord Penrose and to the Treasury Select Committee. It seems likely that this evidence was sufficient to force the FSA to insist that Equitable Life included provision for a review of Drawdown schemes and compensation. But wouldn't this have been better done as part of an overall review?

  • 19/12/2001 - Professor David Blake's Review of the Compromise Scheme Documentation

    EMAG has commissioned this review from Professor Blake, professor of Financial Economics, Head of the Pensions Institute at Birkbeck College, University of London, and makes it available for the benefit of Equitable members and policyholders.

  • 06/12/2001 - Equitable Sends Out Documentation for the Compromise

    Most members will have received the second purple packet - 190-odd pages of scheme of arrangement, voting papers, interim accounts, covering letter and Q&A booklet.

    Practical details, opinions and recommendations are found on our Compromise page. The documentation paints a bleak picture of the Society's position, especially in the event of the vote going against the Compromise scheme. To obtain an independent view of the position EMAG have asked Professor David Blake, professor of Financial Economics, Head of the Pensions Institute at Birkbeck College, University of London and a highly respected consultant to prepare an assessment which will appear in the week starting 17th December.

  • 29/11/2001 - FSA indicates how it would Act on a NO vote

    Correspondence between EMAG and John Tiner, Director of Consumer, Investment and Insurance Directorate of FSA gives some indication of the approach of FSA to the Compromise and how the FSA would act if the compromise scheme failed.

  • 29/11/2001 - FSA Reports on Future Insurance Regulation

    FSA has published its report on the future of insurance regulation.

  • 26/11/2001 - Equitable In Court on Compromise

    Without the courtesy of the notice that we requested on behalf of members, the first Court hearing in the Compromise proceedings was held on Monday 26th November, before Hon. Mr Justice Lloyd in the Chancery Division at 10:30am, in Court 18 at the Royal Courts of Justice in the Strand, London. This was the hearing to approve the definition of the classes of policyholder who will separately vote on the compromise scheme.

    The Society's case was made by Mr Gabriel Moss QC, who was able to maintain (according to an eyewitness) an aimiable exchange with Mr Justice Lloyd through the 4 hours of proceedings. Letters had been received by the Court from members Steve Hardcastle and Christopher Whitmey and from solicitors Class Law acting on behalf of a group of international members. These were examined by the Society's team over lunch and Mr Moss stated that they added nothing to the argument.

    The text of the full scheme of compromise was referred to in Court and Mr Moss QC noted that it differed only in minor changes and technicalities from the proposals which were the basis of the ``rigorous and extensive consultation'' extended by the Society.

    It appears that the meeting on the Compromise will be on 11th January, with voting required by 4th January and a result announced on 25th January.

    The Society obtained the approval it sought at this stage

  • 14/11/2001 - New Policyholder Groups Consult Their Lawyers

    A group of international policyholders is being formed by London-based solicitors Class Law ( 1 Great Cumberland Place, London W1H 8DQ Tel 0207 724 2526). Now a new group of late joiners (those sold WP policies between December 1998 and December 2000) are meeting at the offices of Bristol lawyers Clarke, Willmott and Clarke. Click for further details

  • 10/11/2001 - Treasury Consults on Administration for Insurers

    The Treasury is using its power under the Financial Services and Markets Act 2000 to bring in changes in regulations allowing insurers to be placed in administration rather than wound up. These could be in effect by March 2002.

  • 31/10/2001 - Adjournment Debate in House of Commons on Equitable Life

    Read the record of the adjournment debate secured by Christopher Chope MP, Conservative Treasury Front-bencher.

  • 29/10/2001 - Maladministration Complaints

    The Parliamentary Ombusdman Michael Buckley made an announcement that he would investigate the regulation of Equitable Life by the FSA (this will be a statutory inquiry) following the FSA's own Baird report. The Ombudsman will liase with Lord Penrose to avoid overlap.

    Congratulations to Liz Kwantes of ELMHG who led this campaign and many thanks to Sir Gordon Downey whose cogent support has been invaluable.

    As of 26th September 2001, the Parliamentary Ombudsman suspended enquiries into maladministration complaints relating to Equitable until the FSA report (into its own handling of Equitable) be published. This was an extraordinary state of affairs and indicates just how deep the roots of this matter went. The FSA announced on 6th August that its inquiry was complete except for comment by affected parties (and it was published on 16th October 2001).

    Sir Gordon Downey, former head of the PIA, suggested, in letter to the Times, an emergency rescue of the Society, and a fully independent inquiry into the role of the regulators.

    We also suggest as additional complaints:

    1. The lengthy delay in correcting inequities between those taking benefits or leaving and those remaining before 16th July 2001.
    2. The continuing failure, especially in the light of the above, to ensure that policyholders had adequate information on which to base their decisions.
    3. Reported disparities between the terms available on transfer to individual policyholders and those negotiated by group schemes.
  • 17/10/2001 - Baird report on FSA regulation of Equitable Life available

    The Baird report into the FSA's regulation of Equitable Life since 1st January 1999 has been laid before parliament by Minister Ruth Kelly MP neatly between the Treasury Select Committee hearing on 16th October 2001 and the debate on Equitable Life at 9:30 am on 17th October 2001 in Westminster Hall.

    The Baird report is made available on the treasury web site.

    At risk of misinterpretation we give an `instant' and personal impression.'

    At 250 pages this is a substantial work even though it covers just over one year. It contains a long account of intensive discussions between Equitable Life, Government Actuary and Government Counsel late in 1998, during which the Equitable Life's reserving policy was repeatedly challenged. The whole industry's practice was based on the notion of asset share which was taken to correspond to the statuory but undefined notion of Policyholder's Reasonable Expectation. At the House of Lords, as we all know, this correspondence was unhinged. EMAG's committee at least is unclear what takes its place. There are several Government Counsel statements recalled on the unpredictability of recourse to the Courts.

    There is certainly an impression of a great deal of Government awareness and activity out of public view but, as became clear, until the closure to new business at least, little effective action.

    There are indeed many interesting points in the lengthy tale
    e.g. Chris Headdon's revelation that `We do not calculate unsmoothed policy values in general' - i.e. the detailed valuation of contracts in given circumstances was not carried out, or the statement that insurance companies may use implicit assets reckoned as 50% of their average profits over 5 years multiplied by the expected life of the policy (Equitable applied for 1.9B in 1998 but used always less than 1B in its DTI returns). Reinsurance and these matters are covered in detail in chapter 3.

    The discussion of consumer protection regulation contains a good deal of material on the period leading up to the closure to new business.

    Chapters 1-4 deal with division of responsibilities and prudential regulation (solvency etc), chapters 5-6 deal with consumer protection regulation, and chapter 7 contains lessons learned. External review of the work of the Appointed Actuary is among the recommendations, as well as more attention to evolving risk in the prudential regulatory regime and many other points.

    The Baird report is submitted as evidence to Lord Penrose.

  • 17/10/2001 - Debate on Equitable Life in Westminster Hall

    Richard Ottaway MP again secured a debate on Equitable Life in Westminster Hall. He, Barry Gardiner MP, Jim Cousins MP, Angela Watkinson MP, Michael Weir MP, Christopher Chope MP, Vincent Cable MP, John Greenaway MP all spoke cogently and forcefully on the situation. The reluctance of the Parliamentary Ombudsman to act was addressed, as was the misregulation by the FSA as revealed in the Baird report and the lack of information to members on the financial and legal implications of the proposed compromise at Equitable Life. Minister Ruth Kelly MP replied, mostly confining herself to the topic of the Penrose inquiry and the recommendations for change in FSA regulation.

  • 01/10/2001 - EMAG Submission to the Sandler Inquiry

    Apart from Lord Penrose's specfic inquiry the Treasury has established a review of the retail savings industry - the Sandler Review. EMAG committee member Alex Henney has prepared EMAG's submission.

  • 27/09/2001 - Corley Report for the Institute of Actuaries on Equitable Life

    The institute of actuaries report on Equitable Life

  • 20/09/2001 - Compromise Agreement Draft Published

    EMAG has issued its formal response to the consultation on the proposed GAR compromise. The compromise was presented and members questions aired at 16 roadshows. We have a report of the first (Birmingham) roadshow event. The second report by Nicholas Warren QC on the validity of mis-selling claims by non-GAR policyholders and several other legal opinions bearing on this topic are available from the Equitable web site.

    EMAG committee members Paul Braithwaite and Colin Slater who had sight of the draft 2 days ago have provided an initial reaction and a summary of what was learned meeting the Board on 18th September which gives some context.

    We have gathered some early members' responses. Of course these are selected and self-selecting and not in any way a representative sample. Still...

    Please note that these varied views are presented as a service to all policyholders and interested parties and do not necessarily represent the views of EMAG.

    EMAG is hoping to obtain independent assessment of the compromise for members.

    EMAG consultation response - 11 October 2001

  • 17/09/2001 - EMAG presses for Unitisation of Funds

    Advisers have warned of the danger of Equitable using any future profits to build up smoothing reserves in the forseeable future. EMAG is been discussing the possibility of unitising the fund so that smoothing is no longer an issue and future gains can G be passed to members. Please read our discussion paper on unitisation of the with-profits fund.

  • 11/09/2001 - Treasury Statement on Rescue of the Equitable

    A member who wrote to the Chancellor with a constructive suggestion on the problems caused by the administrative delays at Equitable received in reply a standard form letter not referring to his suggestion which contains the following statement:

    "There has been some speculation about the Government putting money into the Equitable as part of the compromise scheme. The Government has considered all the options that have been suggested, including contributing public money to a lifeboat. It does not believe that these are the right way forward. The right thing to do is to have an independent inquiry to ensure that lessons are learnt from what has happened."

    This must be taken as the official Treasury position until further notice.

  • 03/09/2001 - Expert comment on Members Position and Options

    The text of a report by Bacon and Woodrow on Equitable Life prepared for Senior Civil Servants is available http://www.ordreport.co.uk/ It criticises the Equitable Board for witholding information that could enable members to make their decisions on an informed basis.

  • 28/08/2001 - Protected National Groups

    We understand (according to our best efforts to date) that policyholders of the national subsidiaries of Equitable Life Germany and the Republic of Ireland (Eire) are protected under national law from some of the consequences of the House of Lords GAR decision whilst holders of policies purchased in Guernsey (except Dubai residents) are actually in the same position as UK policyholders since their policies appear to have been purchased from agents of the UK company.

    As far as we understand the Eire and German policyholders have suffered no cuts in policy values although there has been a growth holiday in 2001 for German policyholders (where there is no MVA) and a growth holiday (in 2000 and 2001) and reduction of bonus to 6% for Eire policyholders. See our international page.

  • 22/08/2001 - Action Groups meet with Equitable Board

    Representatives of action groups met with the full Equitable Life Board on 22nd August 2001. An agreed communique was issued. Although it is frustrating to members to receive so little information, it is not possible to achieve a frank, interactive exchange between the parties otherwise. A careful scrutiny of the communique shows that the with-profits annuitants and the non-GAR policyholders receive mention.

    Read chair Paul Braithwaite's account of his day - as featured in the Sunday Telegraph.

    It is well known that EMAG's policy favours greater transparency to the members. It is to be hoped that these exchanges will help the Board to realise that members confidence is enhanced by a reliable and regular report of their Society's position, and that lack of information tends to encourage fear and doubt rather than quell it.

  • 06/08/2001 - EMAG letter to Gordon Brown delivered to Downing Street

    EMAG chair Paul Braithwaite accompanied by Lib Dem Trade Spokesman Dr Vincent Cable (and several TV cameras) handed in a further letter to the Chancellor on the need for urgent action to clarify the situation at ELAS and restrain panicky reactions among policyholders.


    Equitable has clarified the position of with-profits annuitants following our enquiries, and our understanding is as follows:

    There is no 16% effect on annuitants (we are told). The effect of the recent announcement is to change the level of bonus for annuitants to 4.5% (excepting those with specific guarantees or contractual terms to the contrary). Most WP annuities increase or decrease according as the level of bonus is greater or less than an `anticipated bonus' level written into the contract. The level of bonus is now 4.5% and this will be taken into account on the anniversary of the annuity (not immediately) when the next years annuity value is calculated by comparing bonus with `anticipated bonus'.

  • 16/07/2001 - FUNDS CUT BY 16% + 3% LOST GROWTH

    On Monday 16th July Equitable cut individual with-profit funds by 16%, removed all growth for Jan-Jun 2001 and upped the withholding of return from with-profits annuitants by 1.5% for an indefinite time. The MVA has been reduced to `only' 7.5% (you lucky people!). Reasons given are:

    1. Fairness between those leaving and those remaining,
    2. Many are leaving.
    3. Heavy fall in the stock market - half of it this year.

    Our observations are:

    1. How can this blanket cut of funds be fair to those who brought in lump sums recently, compared to those who have benefited from years of full bonuses?
    2. Charles Thomson has been in post since early this year. He gave assurances at the AGM in May. If such a reduction was necessary it must have been clear for some time. FAIRNESS between leavers and stayers required that any such adjustment should be made AS SOON AS POSSIBLE. Apparently the Society delayed until their hand was forced by the down-rating of the WP fund by Standard and Poors, and by the need to publish their annual DTI return, showing that provision for GAR claims has been raised to 2.5 Billion.
    3. How much more must it be true for the FSA that they have had plenty of time to contemplate the situtation?
    4. The Society claimed that its funds were in profit last year despite falling stock markets (indeed the FSA encouraged a timely move out of equities). Why do they not reveal the true state of OUR investments instead of citing broad measures of lesser relevance? Are we not entitled to better information than to be told that the sky is falling?
    5. If fairness between leavers and stayers has now been achieved why is there a need for an MVA well above that current in the industry? (Norwich Union 3%, Friends Prov 5% after windfalls) If enough has been done there should be only a need for a `frictional' MVA to cover the costs of drawing on funds.
    6. The Board's need is to attract the trust of policyholders in advance of the compromise to be put forward next month. How can such trust now be restored?

    EMAG Chair Paul Braithwaite says:

    When Charles Thomson made reassuring noises about the future of the Society at the AGM just six weeks ago, he must have known the true position. Unlike the Board he'd been first actuary, subsequently chief executive, for four months. He mislead us.

    As a result many policyholders decided to remain loyal. Those that didn't have got out with thousands more than those with revalued policies left behind.

    The Action Groups have worked cohesively and constructively to support the Socety through these difficult times. But the questions that we have been asking on members' behalf have met with prevarication and stone-walling, as have all members' questions. Now we know why./p>

    Yet again the ELAS board has chosen not to trust or consult the members or the press. A unilateral decision hsa been taken on our behalf and STILL no ordinary member (and the members OWN the Society) has been allowed anywhere near the Board. Everything has changed and yet everything remains the same.

    Equitable is the walking proof of what is wrong with mutuality as a form of governance WHEN it allows a succession of cosy coteries of directors to behave with high-handed contempt for the owners of the Society. and half of this Board have only a nominal 1,000 invested so they don't even share our pain.

    Everyone with a pension has today learned the chilling meaning of the term, "non-guaranteed bonus" It's not worth the paper it's written on. The forthcoming compromise was expected to be in the form of a percentage uplift of non-guaranteed bonuses. Now, unless there is something in it for the nonGARs and the uplifts are of GUARANTEED bonuses, neither GARs nor nonGARs can possibly be expected to endorse. Vanni Treves' short honeymoon has ended.

    Today a million policyholders suffered a fourth crushing blow in their most vulnerable spot - their pension or annuity, and this was the worst by far - measured in many thousands per policyholder.

    The cuts will cause real hardship. Where were the FSA? A toothless, discredited, so-called watchdog that's proved far worse than useless. The professional classes have laboured under the misapprehension that they had the comfort of a safety belt. After this devastating accident we learn to our bitter disbelief that the safetybelt had no anchorage.

  • 13/06/2001 - OFT Transfers Investigation into Unfair Contracts to FSA

    The Office of Fair Trading has transferred its investigation into the market value adjustment (currently 15%) and unfair selling to the Financial Services Authority which has gained powers to enforce the Consumer Contracts Regulations as of May 1st. The investigation is industry-wide in respect of `with-profits' policies and is focussed on the `absolute discretion' claimed by the companies in awarding bonuses. All correspondence has been transferred and the contacts are
    Mr Mark Vowells/Ms Rehana Anait, Unfair Contract Terms Enquiries,
    FSA, 25, The North Colonnade, Canary Wharf, London E14 5HS

  • 11/06/2001 - The GAR compromise - A member's view

    There have been meetings between Equitable and action group members for the purpose of exploring ideas on the proposed compromise. One EMAG attendee, Colin Slater has put forward a note on his views on possible out-comes.

  • 10/06/2001 - Nicholas Warren's Report

    To summarise roughly, Nicholas Warren found little practical possibility of changing or limiting the House of Lords decision, owing to its basis in the construing of the GAR contract. (A part of the argument appears to the numerate person to be founded on mathematical superstition). In an interesting Catch 22 Warren finds that he cannot deeply explore the issue of whether the conflicting interests of the Equitable and the non-GARs limited the extent to which the non-GARs were represented since his client (Equitable) might have conflicting interests with the non-GARs.

    Warren investigates in some detail whether non-GARs themselves have conflicting claims on the Society on the grounds that from the start of selling non-GAR contracts Equitable should have been bound by LAUTRO rules on disclosure and non-GARs were given no information on the potential guarantees which the with-profits fund had granted. The preliminary opinion appears to be that these claims may have merit. This is a personal interpretation, if at all interested you are urged to read the report.

    The report is on the Equitable web site (top left corner) or otherwise obtainable from Equitable or downloadable here in MS Word format.

  • 24/05/2001 - Equitable AGM

    EMAG committee members did best of independents in the poll but the Chairman's choice of Directors led the field. Read detailed voting figures and brief report.

  • 10/05/2001 - Equitable Will Consider Offering Flexibility to Annuitants

    Equitable has written to annuitants AS EMAG and ELMHG have been urging for many months, offering to consider more flexibility for with-profits annuitants. This is quite separate from the compromise proposal.

    It is widely recognised that bonus rates will be much lower for the forseeable future than in the years before 2000. Annuitants who have chosen an expected profit rate based on that experience face declining annuities if there is not change.

    Charles Thomson writes: "The areas we will examine include whether it would be possible to re-base the annuity, accepting a lower figure now and anticipating a lower rate of bonus in the future. We believe that this is quite possible and will take steps in the coming months to make an offer of that kind to all with-profits annuitants who are currently anticipating future bonuses at a high rate. We were also asked whether it might be possible to transfer with-profits annuitants to another company or to allow them to convert to a non-profit annuity. We do not think that either of these will prove to be a practical possibility but we will investigate them, along with the proposals for re-basing annuities, and report back to you later, after the outcome of the compromise scheme vote."

  • 10/05/2001 - EMAG Campaign Succeeds - Equitable to Seek Independent Legal Opinion on House of Lords' Decision

    Nicholas Warren`s report is on the Equitable web site (top left corner) or otherwise obtainable from Equitable or downloadable here in MS Word format. While giving no practical hope of success in overturning the House of Lords decision on the GAR contracts it gives some possibility that non-GAR policyholders may have claims against the Society for non-disclosure of the liabilites and guarantees under LAUTRO rules. You are urged to read the report.

    Read the report of an initial meeting with Leading Counsel Nicholas Warren QC which gives an account of Counsel's instructions.

    In his letter to policyholders via newspaper advertisement in Jauary 2001, Equitable President John Sclater said: "Some members have asked whether the House of Lords' decision can be amended. Our legal advice is this is not possible. However, to reassure members that all avenues are fully explored we are arranging for further independent legal advice on this question."

    Members will be aware that EMAG has been campaigning tenaciously for this end for about 6 months. Final details are still being discussed. However, we are delighted that the Society has realised the advantages of this course of action.

    EMAG and Equitable Life have agreed that Nicholas Warren QC will be briefed - a report is expected in April (2001).

  • 23/04/2001 - Policyholder's Overwhelming Dissatisfaction with Previous Board

    The results of our online survey of policyholders' opinion shows overwhelming dissatisfaction with the previous directors and early recognition of several issues which have emerged to importance recently. EPHAG has asked for a full independent legal audit of the previous Board's actions and advice received with a view to possible action to recover losses - a call which EMAG endorses.

    Equitable has now engaged City solicitors Herbert Smith to "investigate whether there are any grounds for making claims against former directors, advisers, or others who were involved with events which led to the closure of the Society to new business, and if so whether there is any realistic prospect of redress. ..... We will publish their conclusions". `Private Eye' points out in its current issue that Equitable is still advised by the same solicitors, and that action against individuals is unlikely, however, hungry for blood the policyholders. The various parties may well claim that they relied on information or decisions given by others. Will the buck stop anywhere?

  • 16/03/2001 - Transfer penalty increases to 15 %

    Equitable has announced an increase in the penalty for transfers at non-contractual times (this includes transfer of funds in drawdown). No penalty is applied to those taking benefits on retirement or otherwise contractually. The fall in the stock market is cited although no attempt is made to relate this to the Society's portfolio overall. The (LINK REMOVED AT REQUEST OF ELAS) announcement is on the Society's web site. Any similarity to announcements from MAFF must be considered accidental.

  • 12/03/2001 - Equitable Chairman Vanni Treves holds Roadshow

    Read an informal report of Vanni Treves' Bristol roadshow

  • 09/03/2001 - EMAG Meeting with Vanni Treves

    Read the latest exchange of views on capping liabilities, recoveries from former advisers, and the HoL decision review.

  • 07/03/2001 - EMAG Pressure Results in Equitable Releasing Key Information

    Now that the old Equitable fund is closed to new business with new management EMAG has been asking for the board to reflect and respond to the interests of the policyholders and annuitants, exclusively - as it always should have done.

    With Chairman Vanni Treves proposing to open lines of communication with members EMAG requested key items of information at an early meeting. Vanni Treves promised to transmit them on taking up his post. The items were transmitted this week and are available here for inspection. Please click on the item below to read it.

    1. Introductory note from Equitable about the release of this information
    2. The detail of the ELAS Halifax deal - the heads of agreement signed by the parties.
    3. The appointed actuaries paper giving an outline comparison between the Halifax deal and continuing stand-alone (revised text)
    4. An consultation paper on the proposed scheme of arrangement or `compromise' under the Companies Acts to cap the GAR liabilities of the fund
  • 07/03/2001 - Settlement News, Minutes of Meeting

    Representatives of four action groups met with Equitable for a discussion concerning the proposed settlement or compromise. Read agreed minutes prepared by ELPHAG

  • 05/03/2001 - Year 2000 Bonus Declared

    As stated by Equitable Chairman Vanni Treves in his open letter the bonus for 2000 is declared as an increase to terminal bonuses without any additional guaranteed element EXCEPT where this is contractually required (GIRS). The rates from August 2000 on are 8% for pension policies and 6.7% for life policies. To help with-profits annuitants the loss of seven months bonus in year 2000 will be spread over five years.

  • 01/03/2001 - Gauging the New Equitable Culture

    EMAG along with other policyholders has real hope for improvement from the new Board. Communication is improving. Key next steps will be the disclosure of information promised to EMAG - the details of the Clerical Medical fund management deal - the backup from Charles Thomson to the claim that the Halifax deal was better than soldiering on alone - and a clarification of the assumptions and basis of the much-spoken of 1.5 Billion cost of meeting GAR liabilities. We are looking to the promptness, clarity and completeness of these documents to set the standard for the new culture.

  • 27/02/2001 - Equitable deal with Halifax - the price is rising

    Febuary 2001 - Equitable deal with Halifax - the price is rising

    HALIFAX shares rose from 645p to 713p over the week of the announcement of the Equitable deal (FT) - some expectation of future revenue perhaps? Halifax has 2.22 billion shares giving an increase in market capitalisation of 1500 million on the deal. This suggests that there is considerable room for improvement in the terms.

    Equitable's assets are to be sold to Halifax, systems to be taken over and operated by Halifax, salesforce to be taken over by Halifax and with-profits funds to be managed on commercial terms by Halifax's Clerical Medical Insurance.

    The with-profits fund remains `independent' under the existing Memorandum and Articles of Association. It will still have to solve its problems of investment freedom, finding adequate reserves and dealing with the liabilities resulting from the House of Lords' decision.

    What can members do?
    Last summer the price for the Equitable was put around 4 billion. Now we are told to be happy about a price which is 500 million to 1 billion while the fund management is taken on by Clerical Medical Insurance on commercial terms as yet unknown (since revealed after EMAG's request to Vanni Treves on introductory meeting).

    The FSA is responsible for approving this disposition of the Society's assets and future income stream. Members may wish to write to the FSA giving their opinion of the price and putting forcibly the point that the decision on whether to sell should be put to members.

    Write to: Financial Services Authority, 25, The North Colonnade, Canary Wharf, LONDON E14 5HS or call on  020 7676 1000

  • 26/02/2001 - Investigation into the MVA by OFT

    The Office of Fair Trading Unfair Contracts group is examining the 10% ( now 15%) leaving penalty imposed when the Society closed to new business.

    Anyone who has evidence that they were assured that there would be no barrier to transfer and who now is subject to the MVA should send evidence to Unfair Contract Terms Unit - Ray.Woolley@oft.gov.uk or by post. (Please also notify us at emag@emag.org.uk.)

  • 14/02/2001 - EMAG meeting with the new Equitable chairman

    Read a detailed account of the meeting from Paul Braithwaite.

  • 02/02/2001 - Letter to Chris Headdon from Vincent Nolan, EMAG chair, 2 February 2001

    The costs of fund management directly affect members returns. EMAG chair Vincent Nolan has pressed Equitable CE Chris Headdon to give members the final say on the terms of any sale of the fund management. Read his letter.

  • 19/01/2001 - Meeting with Equitable Board Gives Little Comfort

    Members of EMAG Committee met with the Equitable Board on 19th January. Among topics discussed were members' influence on reconstruction of the Board and consultation of member action groups.
  • 12/01/2001 - EMAG Response to Equitable Chief Executive Chris Headdon's Statements

    In remarks reported in the Financial Times on Friday 12th January 2000, Chris Headdon described proposals to reach a negotiated settlement with GAR policy-holders, capping total liabilities due to the GAR option at 1.5 billion. These have apparently also been discussed with the FSA. Chris Headdon described a `package' combining capping GAR liabilities and sale of the business as a whole.

    These two issues are in our view not usefully linked. We are in favour of a negotiated settlement, but only in the case that the legal options have been explored sufficiently to reach an equitable settlement, for otherwise the settlement will not be proof against further disruption.

    Sale seems to us inappropriate at present. If the black hole can be eliminated by agreement on capping liabilities then there is no need for sale - the Society would again be a valuable asset and members would not want to see it sold off in a hurry. If the black hole cannot be eliminated then there is no chance of sale.

    It appears to us that prompt sale may well be in the interests of the a number of parties other than the members, consumer protection agencies with a reputation to consider, expensive advisers who's fees may depend on achieving a sale, but it does not appear to be in the broad interest of the members nor of the group scheme members.

    The transparency and reform of the Board that we are asking for may be more painful for the Society than sale but it could yield a much better result for the members and contributors.

    Strong, independent member action groups such as EMAG are needed ensure that member's interests come first when AGM or EGM motions are tabled.

  • 10/01/2001 - Assurance offered to Unit Linked policy Holders

    James Iddon, customer relations manager at Equitable has written to an EMAG member in the following terms:

    "I wish to confirm that the Society's unit-linked business has been reassured with Halifax Life. Policy terms will remain as before. The Society's investment management operations have been transferred to Clerical Medical and Clerical Medical will assume responsibility for the unit-linked funds."

    "Policies invested in unit-linked funds will not be affected in any way by the with profits fund. The essential feature of the unit-linked approach is the direct link with the performance of specific investment portfolios, rather then the performance of the with profits fund. The value of the units go up and own each day in response to changes in the market prices of the underlying investments."