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Radice outlines routes to redress

Equitable Life Treasury select committee chairman Giles Radice has outlined three possible ways of compensating policyholders over the debacle.

In an interview for BBC&#39s Moneybox programme last week, Radice was asked if policyholders could consider suing Equitable for compensation on the grounds that they were misinformed about the company&#39s true financial situation.

Although the Treasury report does not address compensation directly and does not have the authority to order it, its reputation would heavily influence any future claims. It does criticise Equitable for not making enough information available to policyholders.

In the interview, Radice said compensation for policyholders could be possible if Equitable Life becomes bankrupt or if the PIA ombudsman ruled in favour on cases brought by policyholders.

The third possibility he mentioned is through policyholders demonstrating the failure of insurance regulations governing insurance companies&#39 liability valuations.

Radice said: “The issue of compensation might arise if Equitable goes bankrupt, second, if the PIA ombudsman finds in favour of policyholders. There is the possibility of bringing compensation under failure of prudential insurance regulations but the FSA said this was hypothetical.”

Annuity Direct director Stuart Bayliss, also speaking on the Moneybox programme, said: “Twenty-six thousand policies were sold after the Court of Appeal ruling. These people are in the clearest position of having been ill-informed.”

An Equitable spokesman says: “Equitable has said it will not comment in detail on the interim report or anything arising from it. Everyone is aware, and the report acknowledges this, that parallel reports are taking place. We will wait for the outcome of them all.”

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