Equitable Life competition scheme condemned
The Parliamentary Ombudsman has today issued a damning indictment of the U.K.'s proposed £400 million payout to Equitable Life suffers, many of whom lost their life savings during the company's near collapse back in 2000. The £400 million compensation scheme, yet to be rubberstamped by the government, equates to just £266 per policyholder despite the fact that a recent report suggested losses for policyholders were between £4 billion and £4.8 billion. So is their new hope for Equitable Life suffers?
There is no doubt that the damning report from the Parliamentary Ombudsman will make the UK government sit up and listen but whether additional funding will be injected into the compensation package remains to be seen. This has taken 10 years to bring to fruition and even now there is great controversy regarding the level of compensation and the admission of guilt on behalf of the UK government. While there is no doubt that the near collapse of Equitable Life, and the massive losses which some customers experienced, were the result of guarantees set up by the company itself the regulatory system in the UK was also called into question.
Whether or not the government is able to introduce more money into the compensation scheme is a matter for discussion in the short to medium term but ultimately there is no way they will increase the compensation pot from £400 million to anywhere near the £4 billion estimated losses.
Lloyds bank looking to pull out of government asset protection scheme
Lloyds bank is today in talks with Treasury ministers and FSA regulators as the company looks to withdraw or reduce its proposed exposure to the government asset protection scheme. This is the scheme which would see Lloyds bank insure £260 billion of risky debt which is currently untradeable, therefore reducing any further downside in the short term. However, the company has been struggling to ra...Read More
Homeowners urged to carry out 'winter property checks'
General upkeep and maintenance of property is especially important in winter, homeowners have been warned. Legal & General (L&G) suggested that the value of houses makes it financial sense as well as common sense to keep a house in a good state of repair. Insurers could penalise or dismiss claims if a house has not been looked after. Elaine Parkes, head of technical services at L&G's general insu...Read More
Income protection 'can help with school fees'
Britons who send their children to private schools should consider taking out an income protection policy to help cope with rising fees, one expert has advised.Equity Partners, an IFA specialising in school fees, has advised parents that an income protection policy can ensure education costs are met even if fees increase.Kevin Tooze, managing director of the IFA, said: "If you want to protect the...Read More
UK taxpayers to make profit from asset protection scheme
The Asset Protection Agency, the agency in charge of the UK government's asset protection scheme, is confident that UK taxpayers could walk away with a profit from the scheme of anywhere between £5 billion and £6 billion. This is the scheme utilise by Lloyds bank and Royal Bank of Scotland which effectively insures their toxic assets and "puts a lid" on any potential liabilities in the future. I...Read More
UK insurance sector still under pressure
The UK insurance sector is again under pressure this morning with concerns that solvency levels will fall over the coming months and more and more companies will be forced to raise additional finance elsewhere. Investor appetite for fundraisings is running dangerously low and there are concerns about how and when additional funding could be raised. One option in traditional markets would have been...Read More