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Cable accuses DTI on Equitable reserves

Trade and Industry Secretary Stephen Byers is facing calls to examine the role of his department in the Equitable debacle in the early 1990s.

In a series of Parliamentary questions, Liberal Democrat MP Vincent Cable asks Byers to detail the measures the DTI took when it had regulatory control to ensure guaranteed annuity liabilities were accounted for by life offices.

He points to rule changes made in the early 1990s which stopped crucial information on insurers&#39 liabilities being handed to the Government.

Cable says it is very possible that if there was a regulatory failure in the Equitable Life debacle it is likely to stretch back before the FSA took responsibility for insurance regulation in 1998.

The LibDem trade and industry spokesman has tabled seven questions asking what measures the DTI took when it had control to ensure potential liabilities were accounted for.

Cable wants to know whether the DTI sufficiently scrutinised life offices over guaranteed annuity rate policies and if all the relevant information was disclosed to the Government.

Cable says: “If there was a regulatory failure, it is possible it went further back than the FSA. When did someone realise guaranteed annuity rates could no longer be sustained?”

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