Ten thousand Equitable Life policyholders who annuitised before 1992 will not receive compensation after an amendment to include them in the Government’s compensation package was defeated.
Labour MP Fabian Hamilton said the comprehensive spending review’s announcement of £1.5bn in compensation for victims was “clouded” when he discovered pre-1992 annuitants would not be included.
He said: “I feel strongly that a group of Equitable Life policyholders has been unfairly excluded from the compensation scheme the Government has put in place.”
Hamilton tabled an amendment that was defeated in the Commons by 301 votes to 76.
The Government announced in the spending review it would pay compensation to Equitable Life policyholders who may not have invested if it were not for regulatory failures during the early 1990s.
Treasury financial secretary Mark Hoban said 1992 was chosen as a cut-off date as a result of the Parliamentary Ombudsman’s finding that the maladministration at the insurer only began after this date.
He said: “We are excluding that group of people because they took out policies before any maladministration could have affected their investment decision.”
Liberal Democrat MP for Eastbourne and secretary of the all-party group on justice for Equitable Life policyholders said the decision ignores the recommendations of Sir John Chadwick and the Parliamentary Ombudsman’s reports on how compensation should be paid. He said: “They both said, in writing, in advance, that all the ann-uitants should be treated equally and that these annuitants should not be excluded.”