Those most heavily affected by the Equitable Life debacle are to receive ex-gratia payments from the Government by a new scheme that it has pledged to launch.

The response from the Government follows the Parliamentary Ombudsman's Report into the prudential regulation of the Equitable Life Assurance Society from 1988 to December 2001. The Government has also issued an apology on behalf of public bodies and successive Governments back to 1990 for the maladministration that is believed to have taken place.

The response, the Government said, takes into account the need to balance the taxpayer's interests with those of policyholders. Their statement said that the financial difficulties of the summer of 2000 were ultimately precipitated by the Society's own actions, but also said that the Government does not accept all of the Ombudsman's findings of maladministration by public bodies in the period under review.

"We are concerned that some policyholders have been disproportionately affected by the events at Equitable," said chief secretary to the Treasury, Yvette Cooper. "It is on that basis that we intend to set up an ex-gratia payment scheme to help. We need to consider the fairest way to respond to policyholders and this is what we have asked Sir John Chadwick to advise us on."

The Government has enrolled the Rt Hon Sir John Chadwick to examine the information and advise them on the extent of losses, the proportion of losses that can be apportioned to the maladministration accepted by the Government and the actions of Equitable Life and its advisers, and which classes of policyholder have suffered the greatest impact with regards to Government responsibility. He will also consider factors arising from this work which the Government might take into account when reaching a final view on deciding whether disproportionate impact has been suffered.

- Pensions Age January 2009

Share Story: