Equitable Life. - Members should be compensated. (Warwick & Leamington Liberal Democrats)

Warwick & Leamington Liberal Democrats <info@warwick-leamington-libdems.org.uk>

Equitable Life. - Members should be compensated.

August 26, 2008 1:49 PM

Many people in Warwick & Leamington have been watching with interest the publication of the Ombudsman's report into the Equitable Life scandal. This especially affects residents who joined Equitable Life pension schemes though local employer IBM.

This issue goes back to early 1999 after Equitable Life launched proceedings to cut bonus payments, effectively going back on promises made to policy holders. This affects many people in Warwick & Leamington, some of whom joined Pension Schemes from local employers.

The Ombudsman's report into the Equitable Life scandal makes very disturbing reading. Its Findings show that many Equitable Life policy holders lost money as a direct consequence of regulators failing to keep close enough scrutiny of the company.

Its list of regulatory failures includes:

The failure to adequately scrutinise Equitable Life's returns and accounting policies and the value of its liabilities from 1990 onwards
The failure to act on the problems of the differential terminal bonus policy - and the over-bonusing of some investors at the expense of others
The failure to force Equitable Life to create a contingency fund to cover the risk of losing the Hyman case - which challenged Equitable Life policies and, if lost, would leave them open to massive liabilities
The decision to allow Equitable Life to keep trading after losing the Hyman case

Alan Beddow, Lib Dem Parliamentary Candidate for Warwick & Leamington said, "It's clear that many policy holders have been badly let down by regulators, have suffered financial loss as a result and deserve compensation for the losses caused by the failings of the regulator."

Vince Cable MP

Lib-Dem shadow treasury spokesperson, Vince Cable says, "For years ministers have acted like they were in a castle under siege, hoping that Equitable Life policy holders would give up and go away. Today's report shows that, rightly, this is not going to happen. It is critical that the Government now sets out a credible, transparent and independent process to enter into a dialogue with policy holders over compensation."

"Policy holders who have saved for their retirements, fully deserve fair compensation after this appalling maladministration over more than 10 years." Alan Beddow added.