1 Introduction |
search for compensation for Equitable Life members has been heavy
on inquiries but light on solutions. We welcome the Government's
commitment to resolving matters speedily. It is no less than those
2. We have had a long-standing interest in the prudential
regulation of Equitable Life. This stems from our responsibility
for reviewing special reports from the Parliamentary and Health
Service Ombudsman to Parliament. The Ombudsman published her report,
Equitable Life, 'A Decade of Regulatory Failure', in July 2008,
which made ten findings of maladministration.
3. Our predecessor committee undertook two inquiries.
The first, 'Justice delayed: The Ombudsman's report on Equitable
Life', was published before the Government had responded to the
Ombudsman. The second,
'Justice denied?' which dealt with the Government's response to
the Ombudsman's recommendations.
4. The Government accepted only some of the Ombudsman's
ten findings of maladministration. It announced that it would
establish an ex-gratia payment scheme and commissioned
Sir John Chadwick to advise independently on the extent of relative
losses suffered by Equitable Life policyholders. His remit was
based on this partial acceptance of the Ombudsman's findings.
5. There has since been a change of government. The
Coalition's Programme for Government commits it to implementing
the Ombudsman's recommendation "to make fair and transparent
payments to Equitable Life policyholders for their relative loss
as a consequence of regulatory failure".
In July, the Financial Secretary published Sir John's advice which
has proved controversial because it proposes that policyholders
should receive around 20-25% of their relative losses.
- This report is inevitably short
and intended to inform discussion before the Government announces
the total compensation figure as part of the Spending Review.
Therefore it does not consider Sir John's advice or Towers Watson's
supporting actuarial advice in detail. It does, however, make
observations about the political commitments given by this Government
and by Members of this House, and whether the process followed
by government is based upon safe and sound principles. It draws
on the written evidence we have received from our witnesses, as
well as EMAG and Equitable Life. It also reflects the oral evidence
1 Parliamentary Ombudsman, Fourth Report of Session
2007-08, HC 815 Back
Public Administration Select Committee, Justice delayed: The
Ombudsman's report on Equitable Life, Second Report of Session
2008-09,HC 41 Back
Public Administration Select Committee, Justice denied? The
Government's response to the Ombudsman's report on Equitable Life,
Sixth Report of Session 2008-09,HC 219 Back
Cabinet Office, The Coalition: our programme for government,
May 2010 Back