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Skills of former Equitable board inadequate – Penrose

The skills of Equitable Life&#39s former board were inadequate for the job and it never got to grips with the society&#39s true financial position, according to Lord Penrose in his report on the insurer.
Penrose says critical responsibilities for valuing liabilities, assessing the liability implications of new products and identifying and monitoring risk were carried out by a “discrete part” of the society that was not scrutinised effectively or challenged.
He says Equitable&#39s former board never “got fully to grips” with the society&#39s financial situation, with information too fragmented and their collective skills “inadequate for the task”.
Effective arrangements for making sure there was detailed examination of and onward reporting to the board on actuarial reports was non-existent.
Penrose says: “Equitable&#39s non-executive directors were so wholly dependent on actuarial input from the executive and in particular the chief executive/actuary that they were largely incapable of exercising any influence on the actuarial management of the society.”

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