Penrose report sparks calls for Equitable compensation
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Oliver Letwin, the shadow Chancellor, is to press for compensation for the victims of the Equitable Life scandal if, as expected, it is found that regulators were at fault.
A report into the collapse, written by the former judge Lord Penrose, is due to be published tomorrow. The 818-page report is expected to criticise past board members and senior executives at the life and pensions group, as well as the regulatory authorities that oversaw the company.
In the years before Equitable's collapse in 2000, it came under three different regulatory regimes - first the Department of Trade and Industry, then the Treasury and then the Financial Services Authority. Since the Equitable crisis, the FSA has recognised the failings and has shaken up the way insurance and pensions firms are regulated.
Equitable collapsed after it lost a court case against holders of policies that guaranteed a payout, which Equitable was hoping to avoid. It had insufficient reserves to cover the guarantees.
Policyholders in Equitable are pressing for the Government to compensate them because they argue that the regulators should have spotted Equitable's problems long before they became critical.
Ruth Kelly, the financial secretary to the Treasury, is expected to reject those demands. However, Mr Letwin told The Independent on Sunday that the key issue was whether regulators had failed: "If Penrose shows there was a failure, then we shall be pressing for the Government to work out an appropriate form of compensation."
Ironically, many MPs could be in line for this compensation, as the House of Commons ran an additional voluntary contribution scheme with Equitable.
Ernst & Young, Equitable's auditor, is facing legal action from what is left of the company, as are former directors. It is expected that the Penrose report may provide extra ammunition for those claims.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments