Compensation for some Equitable Life policyholders
Equitable Life policyholders who qualify as having been “disproportionately affected” by the near collapse of the insurer, will receive compensation.
Treasury minister, Yvette Cooper, has apologised for the failures that brought the UK’s oldest mutual insurance company close to collapse in 2000, when it could not deliver the returns it had promised to policyholders.
Over one million savers lost up to 50% of the value of their pension funds and there followed years of wrangling between a policyholders’ action group and the Government, which initially denied any responsibility for the problems at Equitable.
Last July, a report published by Parliamentary Ombudsman, Ann Abraham, accused regulators of comprehensive failure and the Government of maladministration.
It recommended that a scheme be established to consider individual claims for compensation.
However, it could take at least two years for payments to be made and not all policyholders will be compensated.
According to Ms Cooper, to do so would have serious repercussions for the taxpayer and could call into questions the relationship between governments and financial markets.
Judge Sir John Chadwick has been appointed to decide who will receive compensation, and will achieve this by taking into account the relative loss of each policyholder and assessing the extent to which maladministration played a part in the loss.
Category: Companies News, Insurance News
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