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New fears over Equitable unit-linked assets

The security of Equitable Life&#39s unit-linked assets is again under question, with consulting actuaries Watson Wyatt saying it is not convinced the funds are safe in the event of insolvency.

Following Watson&#39s concerns, its clients, including Lloyds TSB, are sending transfer applications to hundreds of their members who have unit-linked AVCs with Equitable saying the future of the assets could be in doubt and that policyholders may want to consider leaving.

In January, the National Association of Pension Funds sought a guarantee from Halifax, which now owns Equitable&#39s unit-linked funds and operating assets, that funds would not be within reach of creditors in the event of insolvency, a move subsequently followed up by Watson Wyatt.

Halifax confirmed the security of the assets was not in doubt but Watson Wyatt says its statements “do not provide complete reassurance” that the assets are not at risk in the event of insolvency.

It says it has not had further clarification from Halifax and that although Equitable&#39s financial position is somewhat improved because of the compromise scheme, insolvency “remains a risk”.

A Lloyds circular seen by Money Marketing says: “In the absence of any further clarification, it appears in the event of Equitable&#39s insolvency that there is no specific guarantee the full value of your unit-linked funds would be available.”

Halifax spokesman Mark Hemingway says: “We are puzzled by the comments from Watson Wyatt. We have made very clear the unit-linked funds are owned by Halifax and our statement from January still stands.”

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