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Watchdog to accuse Government on Equitable failings

The Parliamentary Ombudsman looks set to find the Government guilty of failing to properly regulate Equitable Life, according to a leaked report.

The draft report, leaked at the weekend, raises the potential for compensation of up to £4bn for the millions of policyholders who lost out in the Equitable Life crisis.

However, many experts fear that the Government will reject this report, as it did when Parliamentary Ombudsman Ann Abraham found it guilty of maladministration over the collapse of occupational pension collapses.

Abraham is thought to accuse the Government of “serious, serial maladministration” and also blame the FSA of failing to properly monitor Equitable Life.

The report has been delayed twice and will have taken three years to compile by the time it is published before the summer recess.

It looks into the roles played by the Department of Trade and Industry, the Treasury, the Government Actuary’s Department and the FSA in the debacle.

The last delay, in October 2006, came after Abraham’s team uncovered the fact that potentially vital information was missing from the evidence that had been given to it by the Government.

MEPs are also investigating the problems at Equitable, with a European Parliament committee due to publish its report by the summer.

Hargreaves Lansdown head of pensions research Tom McPhail says: “It is possible that the Government could again reject Ann Abraham’s findings and there will probably be less sympathy for these policyholders compared with the victims of occupational scheme collapses.”

The Parliamentary Ombudsman would not comment on the leak.

See Equitable fallout

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