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Equitable policyholders warned not to reject compromise

Equitable Life chairman Vanni Treves has warned policyholders they face a bleak future if they reject the compromise deal when they receive their voting packs in December.

Speaking at the National Association of Pension Funds&#39 autumn conference in London last week, Treves said the only way to get the troubled life office back on a firm financial footing is for policyholders to approve the terms of the compromise. He said: “If the compromise is defeated, it will be a very bleak prospect.”

Also speaking at the conference, FSA managing director consumer affairs, investments and insurance directorate John Tiner appeared to approve the deal, saying the life office could become “dangerously unstable” if policyholders reject it.

Treves conceded that, for some guaranteed annuity policyholders nearing retirement, it “may seem more attractive to take their Gars rather than take the compromise”. But he said if the deal fails, there is no “practical plan B.”

Treves issued a challenge to the industry to learn lessons from Equitable. He said it is necessary to communicate better with policyholders and to give them the information they want and not just what the board think they need.

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