Government commits to transparent, fair and independently designed payment scheme for Equitable Life policyholders.
Financial Secretary to the Treasury, Mark Hoban MP, today confirmed the Government’s commitment to establishing an independently designed payment scheme for Equitable Life policyholders that is swift, simple, transparent and fair.
Mark Hoban announced that the Government will take forward a Bill to enable payments to be made in relation to Equitable Life, as included in today’s Queen’s Speech to Parliament. The Government also announced that the final report from Sir John Chadwick in relation to Equitable Life will be received by mid July. The Government has agreed to Sir John’s request for a short extension to the stated timetable. This delay will enable Sir John to respond to issues raised by the independent actuarial panel which has been appointed to examine the assumptions and methodology used by Sir John’s actuaries in their provisional advice to him, adding a layer of independent scrutiny. It will also allow him to consult further on the significant evolution of his work since his third interim report.
The Government will publish Sir John’s final report along with a detailed update, including next steps towards implementing an independently designed payment scheme.
The Government believes that the design of the scheme should be determined by an independent commission. However, it has confirmed two key points: that there will be no means testing, and that the dependents of deceased policyholders will be included.
Mark Hoban said:
For almost a decade, Equitable Life policyholders have fought for a just resolution in relation to losses suffered as a result of regulatory failure.
I am very aware of the acute concern among policyholders who have suffered loss, and the desire to achieve redress quickly. While there will be frustration at this short delay, it is important that our approach is thorough and fair.
The Government is working hard to address the situation as quickly as possible so that we can establish an independently designed payment scheme for Equitable Life policyholders that is swift, simple, transparent and fair, as recommended by the Parliamentary Ombudsman.
Notes for editors
In January 2009, Sir John Chadwick was commissioned to advise the previous Government on a number of issues in relation to determining relative losses suffered by Equitable Life policyholders and the impact of those losses.
Since he started his work, Sir John has published three interim reports, which have given updates on the progress of his work, his thoughts on how to approach the various issues raised and his ideas on calculating policyholder relative loss. These reports are available on Sir John Chadwick’s website (opens in new window). Sir John has also held various consultations with interested parties to help inform his work.
In the coalition agreement, the new Government pledged to “implement the Parliamentary and Health Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.”
The announcement that a Bill will be introduced in the first session is a sign of this Government’s commitment to deliver on its pledge.
The independent actuarial panel is comprised of Gavin Hill FIA, Peter Shelley FIA and Michael Urmston FIA, none of whom have or had any connection with Equitable Life.
- Gavin Hill was Managing Director at National Mutual Life from 1988 to 2002 and is now Chief Investment Officer at Telent
- Peter Shelley has been a senior actuary at AXA UK since 1990 and is currently the with-profits actuary for several funds
- Michael Urmston was chief actuary and then Finance Director at Aviva Life. He retired in 1998 and is now non-executive Director on a range of life assurance company boards
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