Equitable Life, the FSA and the Government Actuary got a rough ride last week as a prominent Parliamentary committee published its interim report into the Equitable debacle.
The Treasury select committee's report raises questions about the roles they played in the events leading up to the company closing its doors to new business last December.
The committee criticises a number of decisions made by Equitable, including not building up adequate reserves, the terms of the reinsurance contract taken out in an attempt to lessen its potential liability and its failure to make clear to its policyholders the seriousness of the situation.
It also said the Government Actuary should have been more accountable to Parliament and should be forced to report back regularly on the life insurance sector.
The report points out that Government Actuary Chris Daykin was unable to provide details about the supervision of Equitable, and said this is not adequate.
The committee also criticised the FSA for not taking a more active role in “prudential supervision of the life office”.
The committee heard evidence from Daykin, FSA chairman Howard Davies, former Equitable chairman John Sclater and former chief executive and appointed actuary Chris Headdon.
The FSA's report on its role as regulator of the industry since the start 1999 is expected later this year.
The committee says it hopes the FSA will not limit its review to events after 1999 but should look at the complete history of regulation dating back to 1993.
If the FSA does not do this, committee members say they will do it for the regulator.
Committee member Labour MP Jim Cousins says: “It is far too early to jump to conclusions about the role of the regulators but clearly our successors after the election will want to take away the curtain of secrecy about the Government when it was the regulator.”
l Verity's View, p28