Equitable Life is only weeks away from issuing a compromise deal which
could save the society from spiralling uncertainty but payoffs to
guaranteed annuity rate holders could be lower than expected.
The deal should be published to policyholders in mid-September following
an “open and constructive” meeting between policyholder action group
representatives and Equitable's board last week.
Any proposals will have to account for potential misselling claims from
Nicholas Warren QC is currently investigating whether claims can be made.
The outcome of his report could affect the scope of the compromise and the
size of any uplift to GAR holders in exchange for their guarantees.
The society has until March 1, 2002 to clinch the compromise, which will
secure a £250m injection from Halifax. It will need final High Court
The fate of with-profits annuitants was also on the meeting's agenda.
Equitable is investigating whether they can switch to conventional
Hopes of getting policyholder agreement had foundered after the recent
bonus cuts but the face-to-face meeting has revived optimism. Another
meeting has been set for next week. IFAs, however, remain sceptical that
the compromise can be reached, despite best efforts by action groups.
Income Drawdown Bureau director Ronnie Lymburn says: “They are trying to
test the water with the action groups to gauge the strength of feeling
towards the compromise. But they have to remember the action groups are not
particularly representative of the policyholder population as a whole.
Getting the scheme agreed is a massive leap, even with action group