Equitable Life back in the headlines

Equitable Life is again back in the headlines with news that a number of pensioners who suffered enormous losses when the company effectively reneged on policy payments are to approach the UK government about an increased compensation program. The Equitable Members Action Group will write to various ministers in the coalition government to demand an increase in the rumoured £500 million compensation payment being discussed, with some estimates putting overall losses at nearer £5 billion.

There have been a number of investigations into the Equitable Life situation after various regulatory problems arose with the government taking partial responsibility for the collapse of previously agreed payments to policy holders. However, this situation has dragged on for years and, if the rumours are correct, those who suffered enormous losses may well have to take a 90% hit with only 10% of overall losses available as compensation. There is also the issue of the timing of payments with an agreement unlikely to be reached until well into 2011.

While the previous Labour government has taken great criticism with regards to the Equitable Life situation it is worth remembering that a number of the alleged regulatory issues occurred in the 1990s under the previous Conservative government. The demise of Equitable Life, and its eventual inability to cover future liabilities, occurred back in 2000 and impacted 1.5 million people.