Government blamed for near collapse of Equitable Life

Fri, 04 Jul 2008

The Parliamentary Ombudsman is to find the government guilty of maladministration over its handling of the near collapse of Equitable Life, claims a source close to the inquiry.

The delayed report should be published on 14 July and Ann Abraham, the Parliamentary Ombudsman, is expected to recommend that those who lost out be compensated . According to a source close to the inquiry, if the government does not accept the findings made by Ms Abraham, the matter may go to judicial review .

In 2000, Equitable Life stopped accepting new business after it failed to find a buyer and couldn’t fulfil its promises to policyholders. The European Parliament announced that it would investigate to see if the British government sufficiently tried to protect policy holders in January 2006.

The life assurer sold off the majority of its operations, transferring most of the society’s fixed pensions to Canada Life in February 2007 and its £1.7bn-worth of with profits annuities to Prudential last December.
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