The Government must devise and implement a scheme to compensate policyholders affected by the collapse of Equitable Life, says a damning European Parliamentary committee draft report.
As revealed in last week’s Money Marketing, the committee finds the Government guilty of severe regulatory failings which contributed to Equitable’s near collapse.
The report accuses the Government of a light-touch approach to regulation and “piecemeal” implementation of European legislation.
It says the current systems of redress, including the Financial Ombudsman Service, “are a mess” and suggests that legislation is changed to improve its reach and ensure it is “truly independent of the FSA”.
The report is subject to amendments by the comm-ittee and there will be a vote on May 3 before it is presen-ted to the European Parliament. The committee has no power to force through its conclusions.
Labour MEP and comm-ittee member Peter Skinner has accused committee members of deliberately politicising the report and “betraying policyholders”. He will table amendments in an attempt to water down criticism of the Government.
LibDem MEP and committee rapporteur, Diana Wallis says: “It is clear that redress systems are a mess. People were pushed about from one place to another. They had a totally unsatisfactory response. This is not what people should expect from Europe’s internal market.”