The day is finally dawning when the entire Equitable Life debacle may finally come to a satisfactory conclusion. The Treasury has published an update on the current situation and now hope/expect to begin making redress payments in 2011. There are something like 1.5m Equitable Life policyholders that may benefit from this outcome. To quote directly from the HM Treasury website:
The Coalition Government confirmed its commitment to “making fair and transparent payment to Equitable Life policyholders, through an independently designed payment scheme, for their relative loss as a result of regulatory failure“. In the two months since coming to power the Coalition Government has taken important steps towards implementing that commitment.
The Equitable Life (Payments) Bill
The Government has taken another important step forward in the establishment of an Equitable Life payment scheme by introducing a Bill into the House of Commons. The Bill, which was announced in the Queen’s speech on 25 May, enables payments to be made to Equitable Life policyholders in the future. The Equitable Life (Payments) Bill was introduced on 22 July 2010. More information can be found on the parliament website.
Independent advice from Sir John Chadwick
The Government has published independent advice from Sir John Chadwick on the financial losses sustained as a result of Government maladministration in the regulation of Equitable Life. Alongside the report, the Government has published the first robust figures surrounding the caluculation of relative losses suffered by policyholders, based on detailed analysis of Equitable Life’s database. These estimates were provided to the Treasury by Towers Watson.
Independent Commission on Equitable Life Payments
Furthermore, the Government announced the appointment of Brian Pomerory, John Howard and John Tattersall to the Independent Commission on Equitable Life Payments. The commission, which was announced on 26 May, will advise the Government on the allocation of payments and the design of the scheme. The commission will begin work imminently with a view to reporting in early 2011.
There is the warning though, which is of course the caveat for pretty much everything at the moment.
“…any scheme will need to take the potential impact on the public purse into account. The Government will need to consider what is affordable as part of the Spending review”.
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