A four year enquiry by Parliamentary Ombudsman Ann Abraham, into the failings of Equitable Life, due to be published next week, could open the door for over one million policy holders to claim compensation from the government.
The report is expected to be particularly damning of the Treasury, Financial Services Authority and the Governments Actuary’s Department for failing to adequately regulate the company.
Many policy holders held their pension savings with Equitable Life and the cost of claims against the Government is likely to reach £4 billion.
An initial report found that Equitable Life brought about it’s own downfall by being too generous with payments to policy holders. Not satisfied with the report the matter was taken to the European Parliament, which ruled that the UK government held responsibility because it did not ensure that EU legislation on insurance had been correctly implemented.
The troubled company has recently been occupied in selling off parts of the business and in legal actions against former directors and auditors. In 2007 the company sold off £1.8 billion of it’s with profits business to Prudential.
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