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Watchdog dismay at response on EqLife

Parliamentary ombudsman Ann Abraham has branded the Government’s response to her report into the Equitable Life collapse as “deeply disappointing”, saying it offers insufficient support for the rejection of her findings.

Abraham’s report, Equitable Life: A Decade of Regulatory Failure was published in July 2008 and a further report, Injustice Unremedied: the Government’s Response on Equitable Life, was laid before Parliament last week.

In the 2008 report, Abraham found the Government guilty of maladministration and said it should establish and fund a compensation scheme for those who lost money due to the life office’s problems.

But the Government rejected the ombudsman’s recommendations to fund an independent compensation scheme, offering only ex-gratia payments to those policyholders deemed to have suffered “disproportionately” from the firm’s failure.

In her latest report, Abraham says she is unconvinced by the basis of the Government’s rejections of her findings and is concerned by its decision to ask Sir John Chadwick, a retired judge, to advise them on an alternative compensation scheme.

She says there is no detailed timetable for this work and that the link between maladministration and the remedy to be provided has been broken.

The ombudsman says: “The Government’s response to my report provided insufficient support for the rejection of my findings of maladministration and injustice. It also begged a larger question as to what the purpose of regulation is supposed to be.”

Equitable Members’ Action Group spokesman Paul Braithwaite says: “Now is the time for MPs, regardless of party, to support their own ombudsman and the sufferers of the injustices.”

Liberal Democrat MEP Diana Wallis adds: “The Government should do the honourable thing and compensate the losers on the basis of justice, not need.”


Rally round

Equity markets have rallied hard from extreme pessimism and oversold levels in early March and there has been some recovery in the credit markets, with prices hardening and spreads narrowing as liquidity returns. The turn-round has been remarkable but have investors cast aside their pessimism too quickly?

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Old Broad Street Research (OBSR) has launched an international fund ratings service. The company says the service focuses on identifying, researching and rating mutual funds across a range of asset classes managed by fund managers irrespective of their location.It is intended to assist wealth managers, international life companies, investment platforms and professional advisers with independent […]


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