Without wishing to speak out of turn on this one, could we direct a polite
reminder to the Treasury and FSA? They have launched an all-singing
all-dancing review of financial services but haven't they missed the point?
There is an insurance company, haemorrhaging money and members with
massive consumer detriment. It may be reduced to little more than a shell
in the next few months in a protracted and painful process. The only
beneficiaires will be some of the biggest pension providers which might
just get enough business to get stakeholder to add up.
Equitable Life was forced to close its doors to new business on the back
of a court ruling but it has become clear it had not been reserving
adequately for a decade. This is a massive failure for the old board but,
with respect, it is also a massive failure for the regulatory authorities –
the FSA, the Treasury and the DTI.
The legal and accountancy professions also ought to do some soul-searching
about their word-of-mouth recommen-dations which they thought saved them
from anything vulgar such as commission.
The FSA was, as far as we know, on schedule to complete its internal
invest-igation but in a Parliamentary answer put out late on a Friday, the
Treasury announced a delay until the autumn.
We suggest that the Government devotes some of its considerable resources
obviously being spent on reviewing and researching to take a proper look at
what went wrong so it does not happen again. The Treasury should publish
the internal FSA inquiry as soon as possible. Then there should be a public
inquiry to look at what went wrong.