The million policyholders that lost half of their investment with Equitable Life in 2001, when the company came to the brink of collapse, have been given some hope that they will be at last be able to seek compensation for their losses as a report from the Parliamentary Ombudsman Ann Abraham, is published.
The ombudsman found evidence of “serial regulatory failure” by the government departments and watchdogs that were supposed to be protecting the insurer’s customers. She identified 10 instances of maladministration in the period leading up to December 2001, called on the government to apologise to policyholders for the “injustice” they had suffered and recommended that ministers set up a compensation scheme.
Chancellor Alistair Darling has insisted that the government cannot be held responsible for compensation, but he faces a tough fight from the ombudsman who’s report follows a European parliament finding that also claimed compensation should be paid.
Compensation for losses is likely to be around £4.5billion.
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