New hitch threatens Equitable Life compensation
By politics.co.uk staff
MPs have raised concerned about the government’s plans for giving compensation to Equitable Life policyholders, ahead of next week’s spending review.
The public administration select committee warned that if, as expected, the Treasury announces the sum available for compensation as part of the comprehensive spending review, it must specify how it has balanced fairness to the taxpayer and affordability if it is to remain true to its word.
It is also concerned that recommendations made by the parliamentary ombudsman into compensation by policyholders are only partially compatible with the terms of reference provided by Sir John Chadwick earlier this year.
He had been commissioned by the last government to offer independent advice on the extent of relative losses suffered by Equitable Life policyholders.
“We recommend that the government re-engages Sir John Chadwick to establish what conclusions he would reach under terms of reference which reflect all ten of the ombudsman’s findings,” the committee’s report concluded.
“We believe this work can be done in parallel with the independent commission’s work to design a compensation scheme.”
Regulatory malpractice was attributed as the reason for the crisis at Equitable Life, which collapsed in 2000. Over 30,000 policyholders have died since then.
The government is currently legislating to “give the Treasury statutory authority to incur expenditure in making payments to Equitable Life policyholders”.
