Azara Blog: Government admits that there was government maladministration over Equitable collapse

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Date published: 2009/01/15

The BBC says:

The government will compensate those policyholders "hardest hit" by the collapse of life insurer Equitable Life, the Treasury has announced.

Minister Yvette Cooper also apologised to the million-and-a-half policyholders who had lost money.

A former appeal court judge will advise the government on who will receive payment and how much.

Opposition MPs and campaigners, however, have said the scheme does not go far enough.

Liz Kwantes, of the Equitable Life Members Help Group, said she was worried about further delays.

"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.

More than eight years after the Equitable closed to new customers, the government has admitted that some regulatory bodies were partly to blame.

"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.

Unfortunately the key phrase is "hardest hit". That is fairly meaningless, since almost everyone involved lost a lot of money. No doubt some extreme, possibly politically correct, definition will be used which will be such that hardly anyone gets any money from the government.

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