Mairead McGuinness Fine Gael MEP

Equitable Life

The near-collapse of the Equitable Life Assurance Society shocked not just the firm's policy holders, but the whole life insurance industry.

According to the report that eventually led to the creation of a Temporary Committee of the European Parliament to investigate the situation, Equitable Life was promising its policyholders more money than it actually had for more than a decade, which resulted in thousands of pensioners and investors losing money.

I chaired the European Parliament's Inquiry into the Equitable Life debacle. I worked closely with the UK Ombudsman in the process. A key recommendation of the Inquiry report was that a compensation scheme should be set up by the UK Government. In January 2009 such a scheme was announced. However, I am not convinced that it will go far enough and I continue to fight the cause for all those involved.

I welcome the confirmation that the proposed compensation scheme will be open to policyholders across the EU, including Ireland. However, I am concerned that the UK Treasury appears to be playing down expectations by saying it wants to focus on those who were hardest hit. This is not acceptable, the findings were very clear. People must and should be compensated.

Our committee was the first to highlight the reality and drawbacks of light touch regulation, which was a feature of the UK regime. Policy holders are still waiting and we will continue to keep the pressure on for compensation.

Learn about the Parliament's investigation and read its recommendations, made in its final report (A6-0203/2007).

UPDATE - May 19th, 2011

Equitable Life Compensation Payment Scheme Details Announced.

I am writing to let you know that compensation payments to eligible savers in the collapsed Equitable Life pension company will begin being made by the end of June.

Details about how the payment scheme will work were announced by the UK Government this week and simultaneously published on the 'Equitable Life Payment Scheme' website, which has been created to provide further information; its address is:

http://equitablelifepaymentscheme.independent.gov.uk

The website includes useful information about the Scheme rules, the administration and timetable, the methodology behind loss and payment calculations, the Scheme’s approach to making payments, the details of the queries and complaints procedure and the plans for communicating with policyholders.

The website includes comprehensive information about, and sets out far better than I can the details about who is eligible for a payment calculation under the Scheme.

I would encourage everyone who can to look at the website.

Most importantly the UK Government said that policyholders do not need to do anything at this stage because the Payment Scheme, set up to deal specifically with compensation payments to Equitable Life policyholders who have suffered financial losses as a result of Government maladministration, will contact all eligible policyholders directly in the first instance to provide further information.

I have always believed that the victims of the collapse of Equitable Life should be compensated for their loss.

I have never stopped working for Irish policyholders in particular, by calling for their inclusion in any payment scheme. It is satisfying to know that those who are eligible will finally be receiving compensation for their loss.

I would stress again that policyholders look in detail at the website to see if they are eligible and what level of compensation they might be entitled to. I dare say that not everybody who has been a victim of Equitable Life will receive the compensation they believe they deserve and some will be disappointed; nevertheless, I wanted to share this important development with you.