Not very equitable

22 February 2008

The British government continues to do its utmost to avoid any discussion about the Equitable Life debacle that might involve the dreaded C-word: compensation. A European Parliament Committee of Inquiry in May 2007 adopted a special report recommending just that. The UK government bears responsibility, the committee found, because of failures to comply with EU directives on life insurance, writes Stephen Gardner. At first the Treasury simply ignored the report. MEPs got hot under the collar and castigated the British government for “downright rudeness.” Now, however, following the intervention of  European Parliament President Hans-Gert Pöttering, Alistair Darling has sent a short acknowledgement, though even this has been stamped 'confidential'. The government will not comment until a separate UK parliamentary ombudsman inquiry has been completed. But this has been subject to serious stalling tactics – it was originally supposed to be finished by the end of 2005, but may not even see the light of day before the end of 2008. Needless to say, the longer the delay, the fewer the policyholders to compensate. The government's secretive approach recalls another insurance regulation fiasco: Lloyd's. The European Commission investigated the way Lloyd's was supervised but closed proceedings in 2003 when assured by the government that the rules had been brought in line with EU standards. Following normal procedure, the Commission prepared the infringement file for publication, but – highly unusually – the UK government blocked it, and it remains secret until this day.

 

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