MPs call for Government response to reports on mis-sold Equitable Life policies

15 December 2008 / by Rachael Stiles
MPs are calling on Gordon Brown to apologise for delaying the payment of compensation to Equitable Life policyholders amid news that the government is putting off making a response to an independent report on the Government's failures regarding the firm, and delaying accepting culpability for losses to policyholders.

Over a decade of maladministration, Government regulators "permitted misleading information" to be provided to policyholders, according to the report, authored by Ann Abraham from the Parliamentary Ombudsman, which called for the establishment of an independent compensation scheme for those pensioners affected by the collapse of Equitable Life.

The Government has been stalling on issuing a response to the scathing report, and last week Harriet Harman, the Leader of the Commons, announced there would be no statement until Parliament returned from its Christmas break in January.

When the report was first released in July, the Government said that it needed time consider its findings, the result of four years' investigation which revealed at least 10 instances of government regulatory failure. The report calls on the Prime Minister to accept the failings and see that the one million plus policyholders receive an apology and sufficient compensation for their losses.

Today saw the release of another report, this time from the Public Administration Select Committee, which echoes the requests of the July report, and urges the Government to "accept the Ombudsman’s findings of maladministration" without further delay.

Of the new report, Liberal Democrat Shadow Chancellor Vince Cable commented that "In a week when the Government once again delayed its response to Equitable Life policyholders, this report is another damning indictment of regulatory failure.

"The Government should apologise for the years of delay, anxiety and unanswered questions suffered by policyholders." he said. "Ministers have not only completely failed to regulate properly, but have proven themselves utterly incapable of establishing a proper investigation into this affair."

The new report highlights the plight of those whose pension incomes have been affected by the collapse of Equitable Life's questionable business model. "Over the last eight years many of those members and their families have suffered great anxiety as policy values were cut and pension payments reduced." it said. "Many are no longer alive, and will be unable to benefit personally from any compensation. We share both a deep sense of frustration and continuing outrage that the situation has remained unresolved for so long."

Vanni Treves, chairman of Equitable Life, said in a statement: "It is an outrage that the Prime Minister continues to treat our policyholders with such contempt."

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