MEPs continue fight for Equitable Life victims

2.33.47pm BST (GMT +0100) Thu 26th Jun 2008

MEPs pledged to continue to seek a resolution for the victims of the Equitable Life crisis which inflicted major financial losses for millions of people in the UK and other EU Member States. During the EP Petitions Committee meeting on 25 June 2008, the British petitioners thanked the MEPs for their assistance so far and participated in a discussion with MEPs on what the next course of action should be after the second report form the UK Parliamentary Ombudsmen (PO) is released on 14 July 2008. MEPs also invited the UK PO to attend the Petitions Committee in September.

The European Parliament's Equitable Life Inquiry Committee was set up in January 2006 after the Parliament received two petitions from policyholders who where among the victims of the Equitable Life crisis, having purchased policies shortly before Equitable Life's near collapse at a time when the company was already aware of its problems with maintaining payments to its customers and liabilities to its policyholders, but may have concealed them.

The two petitioners were therefore among the many other policyholders who suffered cuts without having benefited from Equitable Life bonuses in previous years, and since they cannot transfer their policies to another provider, have faced reductions in their annuity payments of up to 40%.

The final report by the inquiry looking into the EU-related aspects of the case was overwhelmingly approved by MEPs in the committee in June 2007 and states that the UK government is "under and obligation" to provide compensation for victims and that the EU directives on insurance were not adequately implemented in the UK.

The UK government's response to the European Parliament's report is that it must await the publication of the 3-times delayed report of the UK Parliamentary Ombudsman, which is scheduled to be put before the UK Parliament in the week commencing 14th July.

Diana Wallis MEP, the rapporteur of the Equitable Life Inquiry Committee's report, said the problems identified in the report are even more likely to occur again in modern circumstances with the global 'credit crunch' and that although there is "better implementation and enforcement of EC legislation in Member States, it can be better and faster".

In the Petitions Committee meeting on 25 June 2008, one of the petitioners, Tom Lake, said to MEPs: "Your bold investigation has already yielded important results for Europe as a whole. We recognise these advances and encourage you to continue your interest as battle is once again joined in the UK, for the essential injustice remains unaddressed after seven years. Indeed, we believe hat of the million and a half victims of this crisis, some thirty thousand may have already died without compensation and perhaps a hundred are dying every week."

He also said: "Our case has been strengthened by recent developments. The UK financial regulator, most recently the Financial Services Authority, has been shown to have been responsible, and indeed has admitted catastrophic failure in a further crisis of UK financial regulation - the run on the Northern Rock bank last autumn. Indeed, we believe that of the million and a half victims of this crisis, some thirty thousand may have already dies without compensation and perhaps a hundred are dying every week."