Government apologises to Equitable Life policyholders
Over one million Equitable Life policyholders have received a formal apology from the Government today following a series of problems which saw life savings wiped out after it almost collapsed in 2000.
An estimated £4 billion was lost between the one million-plus policyholders.
However, the Government has promised only limited compensation for those who were ‘disproportionately affected’ leaving tens of thousands of customers with nothing other than an apology.
Equitable Life, which is Britain’s oldest mutual insurer, was close to collapse in 2000 after the House of Lords forced it to honour unsustainable guarantees which stretched back three decades.
As a result, Equitable Life was left facing liabilities of £1.5 billion and resulted in a collapse in the value of policies and was one of Britain’s biggest financial scandals.
There has been an 8-year campaign led by action groups and policyholders and last summer, Ann Abraham the Parliamentary Ombudsman, accused three separate Government departments of presiding over 10 years of failure at Equitable Life.
Treasury Minister Yvette Cooper told Parliament: “I wish to apologise to policyholders on behalf of the public bodies and successive governments responsible for the regulation of Equitable Life between 1990 and 2001, for the maladministration we believe has taken place.
We intend now to set up a scheme to make ex-gratia payments to those who have been disproportionately affected.”
A former Appeal Court judge has been appointed to advise who should benefit and to what extent the government is liable.
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