Report of the Parliamentary Ombudsman into the Prudential Regulation of the Equitable Life Assurance Society

PRESS RELEASE​

The Commission welcomes the fact that the report of the Parliamentary and Health Services Ombudsman (“the Report”) was presented to the UK Parliament on 16 July 2008. The Report is the largest of its kind ever produced by the Ombudsman and presents an extremely detailed assessment of certain complaints made concerning the prudential supervision of Equitable Life. The Commission will now consider fully the detailed findings and recommendations. The Commission recognises the importance of the Report for the policyholders affected, and, while interested parties should refer to the full version of the Report for details of the findings and recommendations, the following points are of significance to Guernsey branch policyholders:-

• The Ombudsman found 10 cases of maladministration by the prudential regulators and the Government Actuaries Department; 

• The central recommendation is that the UK Government should establish and fund a compensation scheme with a view to assessing the individual cases of those who have been affected by the events covered in the report and providing appropriate compensation; 

• The Report specifically notes that the scope of the investigation includes ‘internationals’ that is, those people who had bought policies from one of the Equitable Life’s overseas or offshore branches, including the Guernsey branch. The Ombudsman reached this conclusion following representations made by the Commission and consistent with the position advised in our press release of 11 May 2005. The recommendation as to eligibility under the compensation scheme similarly applies to ‘internationals’; 

• The Ombudsman concluded that not all policyholders may have suffered loss and the individual circumstances of each person affected must be assessed to establish whether loss has been suffered; 

• The next stage is for the UK Parliament to consider the issues that have been raised in the Report, and the recommendations that have been made by the Ombudsman, and an announcement is expected in the autumn. 

The Commission will continue to monitor developments and where appropriate liaise with the Ombudsman or relevant UK Government agencies.

The full text of the Report can be accessed via the Ombudsman’s website http://www.ombudsman.org.uk/.