Westminster Hall held a debate on Equitable Life yesterday. The mutual life insurer defaulted on its obligations to policyholders back in 2000, and the effects are still being felt today.
Mark Hoban, Shadow Financial Secretary to the Treasury, spoke forcefully:
"In the four months that have passed since the Minister received the ombudsman’s report, we have had not one word from the Government in response. In the meantime, the Government have proved their ability to move quickly. For instance, others have mentioned the speed with which the Government acted to protect savers in Icelandic banks. However, when it comes to discussing the ombudsman’s report and tackling the problems of Equitable Life, they have been sitting on their hands.
It is time for the Government to respond to the report, to make the apology recommended by the ombudsman and to make payments to policyholders that reflect their losses. They may try to wriggle out of doing so, and they may use Lord Penrose’s words and say that Equitable Life was the author of its own misfortunes; but for a decade regulators failed to follow up the warning signs, and their failure to act resulted in opportunities being missed to force management to act properly and avoid the losses suffered by policyholders."
Ian Pearson, the Economic Secretary to the Treasury, promised that the Government "will shortly respond fully to the ombudsman’s report". But why the delay?