In her 2,800 page, much-delayed report, Abraham finds 10 counts of maladministration by the regulatory bodies that were in charge of monitoring the insurer.
She calls for an apology from the public bodies as well as the establishment of a compensation scheme for more than a million policyholders that lost savings as a result of the company’s near-collapse in 2000.
Her findings span both Conservative and Labour governments and the regulatory failings have been leveled at the FSA, the former Department for Trade and Industry and the Government actuary’s department.
Abraham says it was not the regulatory system that failed but the regulators themselves.
Her report lists five counts of maladministration by the FSA, four by the Government actuary’s department and one by the former DTI.
She also dubbed the failure of Government to set up a single inquiry in 2001 that was not hampered by questions of jurisdiction or limited in its scope “iniquitous and unfair”.
She has called for the compensation scheme to be set up within six months and concluded within two years, assessing the individual cases of policyholders and compensating for any financial loss resulting from their investment in Equitable Life.
It is estimated that claims could run to £4bn, but the chancellor is expected to delay his official response to the compensation demands until after parliamentary recess.
Equitable Life says the government has known of the report’s findings for several months so it “is time to get the cheques in the post”.
Chief executive Charles Thomson says: “The parliamentary ombudsman has revealed a catastrophic failure of regulators. What matters now is for Government compensation to reach our long-suffering policyholders as quickly as possible.”
The insurer estimates that around 30,000 of those affected in 2000 may already have died in the eight years since then.