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&#39IFAs would have averted Equitable debacle&#39

IFAs would have stopped Equitable Life carrying on its disastrous reserving and bonus policy, according to the Faculty and Institute of Actuaries.

The report says as Equitable did not sell through IFAs, it did not come under as much scrutiny as IFA life companies.

It says: “We believe this allowed Equitable to adopt some policies and practices which were not prevalent elsewhere in the life industry.”

But Equitable has hit back with an attack on the FIA for failing to find blame with its previous management and allowing the situation to develop.

The FIA says it had no powers to find fault but is recommending an external peer review of appointed actuaries. The FIA believes an independent actuary might have challenged Equitable&#39s practices.

But Equitable says this “merely appears to transfer responsibility from one actuary to another. We will ensure there is no whitewash”.

Under the FIA recommendations, an annual report on the company&#39s financial condition will become mandatory and will highlight any guaranteed liabilities. In addition, the appointed actuary should not hold the role of chief executive.

But Equitable says the recommendations only cover what a responsible actuary should take into account anyway.

Informed Choice managing director Nick Bamford says: “I do think Equitable would have been more in the spotlight. IFAs are a strong force for the consumer.”

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