The FSA issued a statement on 15 January 2009, in response to the Parliamentary Ombudsman’s report into the regulation of Equitable Life. In this statement, the FSA accepted the report’s findings that appropriate standards of administration and regulation were not achieved, and therefore accepted the Ombudsman’s recommendation that individual policyholders that were affected by the maldministration should be compensated by the Government. The FSA apologised for its failings in the statement.
The report, however, did acknowledge that the period covered, 1999 to 2001, was some considerable time ago and therefore the supervisory regime had changed dramatically since this time. It also reassured the industry that the FSA was certainly not acting in bad faith, and neither did it allege that inadequate attention or insufficient effort was at the root of the problems.
The Government also issued its response to the report on the same day. It did accept some, but not all, of the Ombudsman’s findings of maladministration by public bodies. Chief Secretary to the Treasury, Yvette Cooper, stated that, “We are concerned that some policyholders have been disproportionately affected by the events at Equitable”. Consequently, the Government is to set up an ex-gratia compensation scheme for those who have been most heavily affected. In order to get this scheme up and running as quickly as possible, the Government has tasked Rt. Hon Sir John Chadwick to gather relevant information and advise on the content of the scheme.
The Government’s response and a link to the Parliamentary Ombudsman’s report can be found by clicking here.
