This week marks a turning point in the case of the million of policyholders with Equitable Life Assurance Society who have had to wait several years to know what finally becomes of their investment with the insurer. As expected, while some of them might get some compensation many others would not be so lucky.
In what analysts have dismissed as a slap, Chief Secretary of the Treasury Yvette Cooper admitted the failure of regulators to spot the ‘maladministration’ at the life insurance society. The government then went on to announce the appointment of a Senior Judge John Chadwick to rule on how much each would be compensated.
The high point of the whole government statement was the apology it rendered to the victims for not being able to protect them. But many of them are no longer alive and would, probably, get nothing in the end. In actual fact about 30,000 died long before this admission of guilt and the announcement of plans for compensation.
It should be recalled that in July last year the Parliamentary Ombudsman, Ann Abraham, published a damning report in which she indicted the former Department of Trade and Industry, the Government Actuary’s Department and the Financial Services Authority for ?maladministration?. The report also ordered the government to pay compensation to the victims, whose losses were estimated at between 4 billion and 5 billion.
Compensation pay out
Soon after the release of the Ombudsman’s report many expected the government to swiftly react and announce measures to compensate the affected persons. But until this week, none of such was offered. Even after announcing the compensation plans it was still unclear who will get what and how much they will be paid. However, It is understood that the government will make pay outs running into only hundreds of millions of pounds, which will not effectively compensate all the victims.
So far, it is being speculated that only those who were ‘disproportionately affected’ would receive any pay out. People in this category are those whose entire retirement savings were with the firm, those who lost more money than others and the elderly.
On the contrary those who had money with other companies and those considered not too old to be unable to work and could save again would almost certainly get no compensation.
Of major concern is that no defined terms have been announced for the payments, just as a timetable is conspicuously absent. Attempts in the Common’s heated debate to get Ms Cooper announce a timetable failed, as she reportedly said payments will be made ‘as swiftly as possible’.
Justice delayed and denied?
On every of the surviving victims mind will now be the question whether they will ever get their compensation while they are alive or not. Opposition politicians have already accused the government of not being sensitive enough as the Tories said the Treasury was trying to ‘block, frustrate and delay justice’ for policyholders, while LibDem spokesman, Vince Cable urged a fast-track compensation programme to rectify a ‘festering justice’.
As 67-year-old Sir Chadwick is set to begin his work, it is only hoped that his wealth of experience will help in ensuring that justice is speedily dispensed for the victims.