EQUITABLE LIFE MEMBERS
International Members - ICELP Submission
Last Updated: Thursday, December 02, 2010 02:53 PM
Margaret R Felgate
P 0 Box 310 Mijas Pueblo,
Mijas 29650 (Malaga) Spain
Commission on Equitable Life Payments
(advance copy by email)
wrote to you on 29 September 2010 with regard to 33,500 ELAS
international/overseas policyholders. In our submission I set out how
our large group was sold policies from the jurisdictions of Eire
16.500, Germany 10,500, Dubai 2,500 and Guernsey 10,500.
All overseas policyholders were told our funds were invested in a
separate offshore fund but in fact every one of us were unknowingly
invested in the same “UK Ponzi” scheme which Equitable perpetuated
from the middle 80’s.
is a clear violation of Conduct of Business regulation, but the UK
Government has been extremely careful that any Conduct of Business
investigation into Equitable Life has been avoided. It is worth
pointing out that the actuarial disciplinary committee (see below)
considered the major criticism of Roy Ranson was that he put different
classes of policyholders in the same fund. Overseas policies
were not only mixed in with UK policyholders funds but were also mixed
in with UK GAR policyholders; however, ALL overseas policies
sold were non-GAR policies.
“On the third charge, which the panel considered to be the
most serious of the charges against Mr. Ranson, the panel found a
failure to properly distinguish, in spite of the significantly
different terms and conditions, between the pension policies issued
prior to 1988 and those subsequently issued both in internal analyses
of the financial performance and in communication to policyholders.
The panel found this failure created the basis for the subsequent
problems of the Society”
were sold to residents of Australia, Barbados, Bahrain, Belgium,
Botswana, Brunei, Canada, Channel Islands, Chile, Cyprus, Dubai, Eire,
France, Finland, Macedonia, Malaysia, Mozambique, New Zealand, Norway,
Portugal, Russia, Saudi Arabia, Singapore, South Africa, Spain,
Sweden, Switzerland, Tanzania, Thailand and the USA. One thousand two
hundred pension policies were also sold to staff at the Universities
of the West Indies.
Their pension funds totalled GBP 45 million.
The total value of the overseas funds at 3l December 2000
according to Equitable Life was GBP 980.7 million.
are extremely concerned about how the UK Government intends to
compensate all overseas policyholders, some of whom may be UK citizens
but many who are non UK citizens. Legally non UK residents cannot in
any way be subject to UK public purse considerations. They must,
therefore, be compensated in full for their total losses as
recommended by EQUI. That body decided that EU Life Directives
were not implemented and that EU passporting procedures were
the present compensation scheme, there is no democratic way the UK
authorities can meet their international obligations to compensate
overseas policyholders in full as per the EQUI report and the
unanimous adoption of that report by the European Parliament. The very
minimal sum of monies your committee is tasked to distribute would
provide overseas policyholders with barely 10% compensation for their
actual losses. The EU authorities could hardly be persuaded that
their nationals should be forced to accept a 90% cut in their
compensation for loss, caused by the failure of the UK Regulators
because their loss is now subject to UK public purse considerations.
As a result some parties are worried that HMT may be planning to
“buy off” the groups in Ireland and Germany to avoid a return to
the EU/European Courts given that the European Commission has not been
consulted in the UK Government’s compensation process.
situation is further compounded by the very serious problem of missing
data. Sir John Chadwick wrote about the data problem in his second
interim report. Amazingly, data are NOT available prior to the end of
1997 for international policies. How could your committee
possibly go about ascertaining the true losses and compensation due to
us under these circumstances?
overseas polices have been in force since 1990 so there are at least
seven years missing data. Overseas policyholders require to know the
reason such a serious situation came about, when properly and readily
available insurance data are required by law and good practice to be
kept for many decades. This is an obvious requirement, particularly
for in force and relatively recently matured policies. Official
sources have until recently said that the data were missing entirely;
however Equitable’s new Chief Executive stated that some old
archival data has now been located.
international policyholder problem has two main aspects. The
data issue is clearly your Commission’s
urgent concern, whereas by the criteria of EU/International Law
and the findings of EQUI you cannot succeed given your existing Terms
of Reference. And as well you know, the data issue has even wider
ramifications, because in fact there are no readily available data for
any ELAS policies prior to 1992 very conveniently covering the period
when Equitable’s main financial problems developed! But here
again some archival tapes in an older electronic format have come to
light! It is yet another illustration of obfuscation, evasion
and outright lies by the previous management of Equitable and the FSA
which was the UK Regulator for overseas policies.
international policyholders ask ICELP officially to request
Equitable’s help in getting their archival data read in. It is
an essential first step whatever happens next. Your existing Terms of
Reference do not require you to get all the pre-1992 data read in,
partly on account of which it currently appears that, like their UK
counterparts, pre-1992 international policyholders will not be
eligible for compensation at all!! For the record overseas
policyholders state their strongest objection to this. We reserve the
right of comment on it in both the UK and the EC/EU.
may recall that as a Guernsey policyholder I have been in
correspondence with the Guernsey Financial Services Commission, which
has asked that its policyholders be treated in the same way as both UK
and other international policyholders. That ought to preclude
any side deals of the type earlier referred to. But once again it
raises questions about the legitimacy of a UK local compensation
process which arbitrarily excludes many policyholders both UK and
International, and post 1992 with-profits annuitants excepted, awards
the remainder only a very small fraction of their actual losses.
Efforts are currently being made to get pre-1992 policyholders included, in which event the international policyholders should also be eligible. Your Terms of Reference might then change accordingly. But if compensation is still to be for only a small part of international policyholder losses, then by International Law, EU and EQUI criteria you will have failed in a large part of your task. The ultimate consequences of such a failure cannot at this stage be foreseen.
Financial Secretary to HM Treasury
Abraham, The Parliamentary Ombudsman
Scheele, Office of the European Commission, London
Van Hulle, Directorate General, Insurance and Pensions, European
Tertak, Directorate General, Financial Institutions, European
Brenchley, Political Section, European Commission
Bowles MEP, Chair of The EU Parliament’s Economic & Monetary
Guernsey Financial Services Commission (GFSC)
Scawen, Equitable Members Trapped Annuitants (ELTA)
Members Action Group (EMAG)