Disciplinary board to investigate Equitable Life actuaries
by Gill Montia
The Accountancy and Actuarial Discipline Board (AADB) is to investigate the way in which government actuaries advised the regulators of mutual life insurer, Equitable Life.
The board will focus its enquiries on the advice given by the Government Actuary’s Department (GAD), between December 1990 and April 2001.
Equitable Life was founded in 1762 and grew into a £26 billion business, with 1.5 million policyholders.
However, it came close to collapse in 2000 because it could not honour guarantees to policyholders.
As a result, around one million people lost up to 50% of their retirement savings.
Earlier this year, Parliamentary Ombudsman Ann Abraham published a report on the events in which she criticised regulators, including the GAD, describing the failures as comprehensive.
The Ombudsman recommended that a compensation scheme to be set up within two years of the publication of the report and suggested policyholders, who have waited years for the chance to recover losses totalling around £4 billion, should receive an apology.
The AADB has the power to demand that individuals appear before an independent tribunal, hand down fines and ban actuarial professionals from practising.