This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.

You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7830938.stm

The article has changed 12 times. There is an RSS feed of changes available.

Version 10 Version 11
Relief plan for Equitable victims Relief plan for Equitable victims
(30 minutes later)
A scheme to partially compensate some policyholders who lost money in the Equitable Life has been announced by the government. The government will compensate those policyholders "hardest hit" by the collapse of life insurer Equitable Life, the Treasury has announced.
The payments scheme will be aimed at those policyholders who suffered "disproportionately". Minister Yvette Cooper also apologised to the million-and-a-half policyholders who had lost money.
Treasury minister Yvette Cooper apologised to those who had lost money after the society's near-collapse. A former appeal court judge will advise the government on who will receive payment and how much.
However, the Equitable's current management and policyholder campaigners said they had doubts about the plan. Opposition MPs and campaigners, however, have said the scheme does not go far enough.
"We agree there has been maladministration in several areas and that government action is merited," said Ms Cooper. Liz Kwantes, of the Equitable Life Members Help Group, said she was worried about further delays.
"And I wish to apologise to policy holders on behalf of the public bodies and successive governments responsible for the regulation of Equitable Life between 1990 and 2001, for the maladministration we believe has taken place," she told MPs. "By the time they decide how to measure it, we've lost another year," she said.
"A lot of people have lost a lot of money. People have had a hard time - some have lost houses, their health has gone," she added.
Regulatory failureRegulatory failure
More than eight years after the Equitable closed to new customers, the government has admitted that some regulatory bodies were partly to blame.More than eight years after the Equitable closed to new customers, the government has admitted that some regulatory bodies were partly to blame.
EQUITABLE: KEY EVENTS January 1999: Equitable tries to abandon a guaranteed payment it can no longer affordJuly 2000: The House of Lords says Equitable must honour its original commitments, forcing the company to put itself up for saleDecember 2000: Equitable Life closes to new business after failing to find a buyerMarch 2004: Lord Penrose's report says the society was the "author of its own misfortune"July 2008: The Parliamentary Ombudsman says regulators failed to protect policyholders and calls for a compensation fund class="" href="/1/hi/business/3219069.stm">Timeline: The Equitable Life saga class="" href="/1/hi/business/7830548.stm">What went wrong at Equitable? "We agree there has been maladministration in several areas and that government action is merited," said Ms Cooper.
"And I wish to apologise to policy holders on behalf of the public bodies and successive governments responsible for the regulation of Equitable Life between 1990 and 2001, for the maladministration we believe has taken place," she told MPs.
We want to focus on those who have been hardest hit Yvette Cooper, Chief Secretary to the Treasury Who will get compensation?
This was highlighted in a critical report published last year by the Parliamentary Ombudsman, Ann Abraham, who called on the government to establish a compensation scheme.This was highlighted in a critical report published last year by the Parliamentary Ombudsman, Ann Abraham, who called on the government to establish a compensation scheme.
It is thought that more than a million of the 1.5 million people who had Equitable polices in 2001 have seen the value of their investments slashed, in some cases by as much as 50%.It is thought that more than a million of the 1.5 million people who had Equitable polices in 2001 have seen the value of their investments slashed, in some cases by as much as 50%.
However, it is not yet clear who will be offered any money, or how much.However, it is not yet clear who will be offered any money, or how much.
And the minister told MPs that any eventual payments would still have to "take account of the position of the public finances". In addition, Yvette Cooper told MPs that any eventual payments would still have to "take account of the position of the public finances".
The announcement was welcomed by Conservative spokesman Mark Hoban who said it was "deserved justice". Liberal Democrat spokesman Vince Cable called on the government to go further.
But Liz Kwantes, of the Equitable Life Members Help Group, said she was worried about further delays. "After bailing out both Icelandic and nationalised bank depositors, Equitable Life investors will not be able to understand why they are being treated less favourably."
"By the time they decide how to measure it, we've lost another year," she said. Conservative spokesman Mark Hoban said the scheme was "about means-testing a compensation rather than compensating people for injustice."
"A lot of people have lost a lot of money. People have had a hard time - some have lost houses, their health has gone," she added.
Management responsibilityManagement responsibility
Ms Cooper pointed out that the official report by Lord Penrose in 2004 had pinpointed the society's management as being mainly responsible for its financial problems.Ms Cooper pointed out that the official report by Lord Penrose in 2004 had pinpointed the society's management as being mainly responsible for its financial problems.
We want to focus on those who have been hardest hit Yvette Cooper, Chief Secretary to the Treasury href="/1/hi/business/7830964.stm">Who will get compensation? EQUITABLE: KEY EVENTS January 1999: Equitable tries to abandon a guaranteed payment it can no longer affordJuly 2000: The House of Lords says Equitable must honour its original commitments, forcing the company to put itself up for saleDecember 2000: Equitable Life closes to new business after failing to find a buyerMarch 2004: Lord Penrose's report says the society was the "author of its own misfortune"July 2008: The Parliamentary Ombudsman says regulators failed to protect policyholders and calls for a compensation fund href="/1/hi/business/3219069.stm">Timeline: The Equitable Life saga class="" href="/1/hi/business/7830548.stm">What went wrong at Equitable?
And she told MPs that policyholders could not expect to be fully compensated for all their losses.And she told MPs that policyholders could not expect to be fully compensated for all their losses.
The former appeal court judge Sir John Chadwick has been asked to advise how the payment scheme should work.The former appeal court judge Sir John Chadwick has been asked to advise how the payment scheme should work.
He has been asked to advise the government "as swiftly as possible" on the extent of relative losses by the Equitable policyholders, the payments that might be due to any maladministration, and which groups of policyholders had suffered most.He has been asked to advise the government "as swiftly as possible" on the extent of relative losses by the Equitable policyholders, the payments that might be due to any maladministration, and which groups of policyholders had suffered most.
"We want to focus on those who have been hardest hit," Ms Cooper told MPs."We want to focus on those who have been hardest hit," Ms Cooper told MPs.
"We would expect it [the scheme] to include looking at the extent of somebody's losses, how great the losses were but also perhaps looking at how great they were as a proportion of their income," she explained."We would expect it [the scheme] to include looking at the extent of somebody's losses, how great the losses were but also perhaps looking at how great they were as a proportion of their income," she explained.
Vanni Treves, the chairman of Equitable Life since 2001, offered a "muted welcome" to the plan, and said he would help by offering advice to Sir John, as well as full access to the society's records.Vanni Treves, the chairman of Equitable Life since 2001, offered a "muted welcome" to the plan, and said he would help by offering advice to Sir John, as well as full access to the society's records.
But he said it would be wrong for there to be any element of "means testing" in the eventual payouts.But he said it would be wrong for there to be any element of "means testing" in the eventual payouts.
"The Ombudsman was very clear that losses that were suffered by huge numbers of policyholders should be made good, independent of the financial situation of individual policyholders," he said."The Ombudsman was very clear that losses that were suffered by huge numbers of policyholders should be made good, independent of the financial situation of individual policyholders," he said.
'Fiasco'
The Ombudsman's report highlighted 10 different instances of mistakes by regulatory bodies in the course of supervising the Equitable between 1990 and 2001.
Ms Cooper did not explicitly accept all the failings listed by Ann Abraham.
But she did admit that the finances of the Equitable should have been scrutinised more thoroughly by the authorities between 1990 and 2000.
And she said misleading statements had been made by the Financial Services Authority after 2001 which "may have caused injustice".
Liberal Democrat spokesman Vince Cable welcomed the apology but described the long-running saga as a shabby fiasco.
"The endless delays by Labour have managed to transform a story of maladministration by the previous government into its own abject failure," he said.
"After bailing out both Icelandic and nationalised bank depositors, Equitable Life investors will not be able to understand why they are being treated less favourably."