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Daily Insurance Industry News
Monday 20th of May 2019
October 15, 2009

Equitable policyholders win High Court case

by Gill Montia

Story link: Equitable policyholders win High Court case

The High Court has rejected the Government’s decision not to implement the full recommendations of Parliamentary Ombudsman, Ann Abraham, regarding compensation for Equitable Life policyholders who lost money when the firm came close to collapse nine years ago.

In July of 2008, Ms Abraham published a report on the demise of Equitable, which from the 1950s had sold policies that guaranteed a minimum annuity rate to investors.

The strategy left the UK’s oldest mutual unable to honour its promises and the Ombudsman’s review accused regulators of comprehensive failure and the Government of maladministration.

Ms Abraham therefore recommended the establishment of a scheme that would consider individual claims for compensation.

However, in January, the Government announced that only Equitable Life policyholders who qualified as having been “disproportionately affected” by the near collapse would receive compensation.

The Equitable Members’ Action Group (Emag), which represents around 21,000 policyholders, demanded a judicial review of the limitation imposed and two High Court judges have now ruled against the Government.

Emag has also been awarded 60% of legal costs.

 

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