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Ombudsman criticises government over Equitable Life
17 July 2008
The parliamentary ombudsman has told the government that it ought to apologise to Equitable Life policyholders after upholding a number of complaints.
Many of the company's policyholders found their retirement savings were significantly reduced following a high court ruling in 2000 ordering it to meet the financial promises it had made years earlier, nearly forcing it to collapse.
Publishing a report titled Equitable Life: A Decade of Regulatory Failure, Ann Abraham noted ten specific points of maladministration by the Department of Trade and Industry, the Government Actuary's department and the Financial Services Authority.
Criticising the bodies for their regulation of insurance companies, Ms Abraham called for a compensation scheme to be set up to pay people who would not have lost out financially had they invested their money elsewhere.
Rather than blaming the system of regulation in place at the time, she argued that parliament had provided those operating it with "wide-ranging" powers.
"The regulators at the time said that they would deliver regulation in a proactive and vigorous way. That singularly failed to happen in the case of Equitable," the ombudsman stated.
