International Policyholders

Last Updated: Tuesday, May 10, 2005 03:59 PM


Update for International Policy Holders - Guernsey GFCS 21 February 2005 (.pdf) 

Equitable's Legal Position 18 August 2004

Guernsey (GFSC) comments on FOS findings 6 June 2003

Good news for Equitable losers - 19 May 2003

Return to Guernsey – GFSC need a good prod! 29 April 2003

Update by the GFCS re International Policyholders  25 April 2003

Letter from Guernsey Financial Services Commission to Margaret Felgate - 17 April 2003
Letter from Margaret Felgate to the GFSC -  13 April 2003

Letter from Class Law to its Equitable clients - 28 February 2003

A special Discussion Board has been set up for non UK residents, so that they can exchange comments and suggestions with each other. It is, of course, open to any others who may wish to contribute.



NB Unfortunately there is a limitation on the size of the message (500 words max) so you may have to continue onto a second one.


Please let us know what you think about this facility and if you would like any changes or updates. You may also wish to elect a co-ordinator for the group. webmaster@equitablelifemembers.org.uk.

Reply from FOS 14 February 2003 (comments by Margaret Felgate)


I have today received the latest NON update on the Ombudsman's decision concerning jurisdiction of the Internationals mis-selling claims.

"I am in the process of considering the further submissions made by Equitable relating to the jurisdiction of the FOS to deal with complaints about individual policies. I am sorry for the length of time this has taken*, but as John Todd has previously explained, the jurisdiction issue has not held up individual cases. I hope to be able to provide you with more information shortly and either John Todd or I will write to you again soon."

Yours sincerely,

Philip Roberts

* Since my own case has been with the Ombudsman since July 2001, I cannot see how Mr Roberts can state that the jurisdiction issue has not held up individual cases!!

Letter from Margaret Felgate to the FOS 31 January 2003

Dear Mr Todd

I  have viewed today's update on the FOS website with the utmost disappointment. It is shameful that I have personally waited 18 months for a decision on my individual mis-selling claim. To be forced to endure yet a further 2 months wait for yet ANOTHER update is an insult to taxpayers in the UK who FUND the FOS  with an annual budget of  GBP 27.2 million
Unfortunately today's update does not include whether or not the the Ombudsman has ULTIMATELY decided if he has jurisdiction or not on  w.p. policies sold by ELAS to approximately 33,500 International Policyholders without advising them of the liability they would have to meet to another class of policyholder, namely the GAR's.
You will remember that you informed me on 02 December 2002  that Equitable had challenged the Ombudsman's decision that he DOES have jurisdiction and that consequnetly the Ombudsman was further deciding his position on jurisdiction.
Please inform me of the Ombudsman's latest decision (WHICH IS NOT INCLUDED IN YOUR UPDATE) on jurisdiction within the next seven days.
Yours sincerely,
Margaret R Felgate
For ELAS International Policyholders

17 September Financial Ombudsman states that he can also hear International policyholders claims. Click here for press release

EQUITABLE LIFE ASSURANCE SOCIETY LIMITED 13 August 2002 (click for press release)

We have received several enquiries from Equitable Guernsey Policyholders regarding the investigations that are being carried out into the Equitable affair and the potential for redress or assistance being available to Guernsey Branch Policyholders who have been victims of the recent Equitable difficulties.  The Commission is continuing to correspond with the relevant bodies in order to ascertain the extent to which redress or assistance that would be available to UK policyholders would also be available to Guernsey Branch Policyholders.  As far as we are aware none of the relevant bodies has formed a final view on this question. 

We summarise below the ongoing enquiries and also the potential sources of redress and assistance for Equitable policyholders advised to the Commission by our lawyers Norton Rose. 

1.            Penrose Enquiry

This is an independent enquiry into the situation that arose at Equitable, led by Lord Penrose, a senior Scottish Judge.  The establishment of the enquiry and its terms of reference were announced by Ruth Kelly MP, the Economic Secretary to the Treasury, on 31 August 2001.  The enquiry will review the background to the Equitable situation going back at least 40 years when GAR policies were first sold.  It will cover all aspects of the Equitable background including the roles of the regulators, the professional advisers and the management.

The terms of reference of the enquiry are “to enquire into the circumstances leading to the current situation of the Equitable Life Assurance Society by taking account of relevant life market background; to identify any lessons to be learnt by the conduct, administration and regulation of life assurance business; and to give a report thereon to Treasury Ministers”.

 The Report is likely to include recommendations as to how the situation might be avoided in the future and it is also possible that it may address the position of Guernsey Branch policyholders.

 The date when this Enquiry will be finalised is not yet known.  It had originally been intended that it would be the end of this year but it is not clear whether or not this target will be met.

2.                  Parliamentary Ombudsman Enquiries

The Parliamentary Ombudsman is investigating complaints about the way the FSA exercised prudential regulation in relation to the Equitable between 1 January 1999 and 8 December 2000.  We understand that the Parliamentary Ombudsman is investigating general issues before dealing with individual complaints.  If at the end of his investigations the Ombudsman found maladministration on the part of the FSA leading to injustice to individuals, he would most likely invite the Government to propose a scheme for redress.

The Commission has been in correspondence with the Parliamentary Ombudsman with a view to establishing whether or not he considers that Guernsey Branch Policyholders fall within his jurisdiction and whether any proposed redress scheme would extend to such non-UK policyholders.  He has not yet reached a final view on this issue.

3.                  Financial Ombudsman Service (“FOS”)

We have previously published the advice obtained from Norton Rose as to whether or not Guernsey branch policyholders’ mis-selling complaints fall within the jurisdiction of the Financial Ombudsman Service and our advisers were of the view that it is arguable that they do (as explained in their report dated 23 November 2001 which is available on the Commission’s website).  The Commission has been in contact with the Financial Ombudsman Service who have not yet formed a final view on this issue.  Their view is expected to be finalised shortly.

4.                  Financial Services Compensation Scheme (“FSCS”)

As from 1 December 2001 protection will be available to all “protected contracts of insurance” under the FSCS in the event of the Equitable becoming insolvent.  The FSCS replaced the regime introduced by the Policyholders Protection Act 1975.  However, the transitional provisions of the FSCS provide that insurance policies issued before 1 December 2001 are protected contracts of insurance under the FSCS if they are UK policies at the beginning of the liquidation for the purposes of the Policyholder’s Protection Act 1975 (the “PPA”). 

The effect of these transitional provisions is that if protection would have been available to a policyholder under the PPA it will be also be available under the FSCS.

The Commission obtained the opinion of Norton Rose on the question of whether or not protection would have been  available to Guernsey Branch policyholders in the event of the insolvency of the Equitable under the Policyholders Protection Act and their conclusions are set out in their above mentioned report dated 23 November 2001.  Their conclusion was that it is strongly arguable that some if not all of the Guernsey branch policyholders would have been entitled to protection under the PPA.

 The Commission has been in correspondence with the FSA on this subject who have indicated that the FSCS have not yet confirmed whether or not Guernsey branch policyholders will receive compensation under the FSCS in the event of the Equitable becoming insolvent. 

 Any enquiries to Steve Butterworth, Director of Insurance

                        Tel: (44 1481) 712801

                        Fax: (44 1481) 712010

                        Email: sbutterworth@gfsc.guernseyci.com 

13 August 2002


Following several months of negotiations with ELAS/Lovells, the Internationals lawyers Class Law are very pleased to announce the "Standstill Agreement" whereby those International policyholders who exited the WP Fund prior to the compromise agreement and joined in the legal fund have succeeded in agreeing a process of compensation which MAY not involve the courts and heavy legal fees for both policyholders and ELAS.

As the founder of the International Policyholders Group, I would like to invite those remaining policyholders to either contact myself or Stephen Alexander at Class Law solicitors in London TEL 0044 1 207 724 2526 in order to be represented for mis-representation/mis-selling claims.


The vote on ELAS compromise scheme which took place on 11 January 2002 was in favour by 97.3% GAR and 99% non-Gar.

On 8 February the High Court sanctioned the scheme. which becomes effective in mid February 2002

International policyholders who are still members of the with profits fund at the date the scheme becomes effective lose their legal right to claim mis-selling against ELAS.

Those members who exited the with profits fund prior to the scheme becoming effective maintain their legal rights to claim mis-selling or mis-representation against Equitable International.

Class Law solicitors are co-ordinating a group of International policyholders  to pursue the  Financial Services Authority. They have identified good evidence for three possible claims against the Regulator. To
join the group please contact Class Law Solicitors at salexander@classlaw.co.uk   Fax 00-44-207-723- 2988

Through constant pressure on GFSC/Parliamentary Ombudsman  we have finally managed to initiate a test case on behalf of Guernsey Branch  policyholders. This had previously been refused because international
policyholders do not have an MP to refer their complaint to the Parliamentary Ombudsman.  We wait to hear the outcome of the test case.

Through pressure brought on the FSA , the Financial Ombudsman Service have consented to re-examine several previous refusals to hear complaints brought by International policyholders from 1st  Dec 2001. The FSA and the FOS have finally been persuaded to acknowledge that they were giving conflicting
reasons for the previous refusal.

The Penrose inquiry has received hundreds of complaints from International policyholders concerning the mis-selling of their policies. If you have not already done so, please forward your complaint with supplementary evidence to:   ELAS International Policyholders File, Hugh Burns, Lord Chancellor's
Dept, 105 Victoria Street, London SW1E 6QT Fax 00-44-207-210-1267

Many members of Equitable Life who have International policies, who live outside the United Kingdom, have said that they have received very little information and support from Equitable, as the Society has been communicating with its members through the press, which is not necessarily readily available to those not resident in UK.


Margaret Felgate has formed a group of International policyholders, so please contact her. mfelgate@mercuryin.es.


To contact ELAS at Aylesbury do not use the 0870 number phone 44 (0) 1296 393100 and ask for Client Servicing or fax them on +44 1296 386181



Scope of Protection to Guernsey Branch Policyholders under UK Legislation (issued by Norton Rose 11 October 2001)

16 August 2001


The Commission has appointed the London Law Firm, Norton Rose, to examine a number of concerns relating to the Guernsey branch operation of Equitable Life Assurance Society; in particular Norton Rose has been asked to consider the position of  international policyholders both in connection with the “ring-fencing” issue and the potential application of the Policyholders Protection Act.


It is expected that it will take some weeks before their findings are made available to the Commission but as soon as we have any information we will publish it on our website.


Enquiries to:       Steve Butterworth

                        Director of Insurance

                        Tel: (44 1481) 712801

                        Fax: (44 1481) 712010

                        Email: swbutterworth@gfsc.guernsey.net


See bottom of this page for letter from Margaret Felgate to GFSC Director Peter Neville and also Peter Neville's reply 23 August.


Letter from an International member in New Zealand to GFSC in response to their press release. With their replies. Click here.


Guernsey Branch Policy Holders can see a letter from the Guernsey Financial Services Commission. Click here to see letter.


Click here to access two letters written by Margaret Felgate to Vannie Treves and Lovell's Equitable's lawyers, pointing out that members with International Policies should  be considered as a separate group when it comes to voting for the compromise agreement.

Policy Protection Scheme re: International Policy Holders

From Financial Services Authority:  5 January 2001

You might find it reassuring to know that the Equitable remains solvent, existing policies are still valid and that it continues to be able to meet its contractual obligations to its policyholders. However, should the need arise, there is a scheme designed to arrange compensation. The immediate objective of the scheme would be to arrange for your contract to be transferred to another provider to ensure continuity of cover, or pay-out, as the case may be . If that were not possible, the scheme provides for compensation to be paid, generally of 90% of the guaranteed amount.


The geographical scope of the Policy Holders Protection arrangements is set out in Section 4 of the Policyholders Protection Act 1975. That section is amended by Section 2 of the Policy Holders' Protection Act 1997, so as to extend the arrangements to allow insurers from the EEA member states and the crown dependencies (Channel Islands and the Isle of Man) to participate in the scheme. However the relevant amendment has not yet been brought into force.


16 July announcement - effect on different policies


Guernsey policies   (except Dubai - see below)
                  As UK

Germany (ELD) policies:

                  NO cut in policy values
                  NO MVA
                  Removal of bonuses from 1 Jan 2001 to  30June 2001
                  Reduction in bonuses from 1 July to 6%

ROI (Dublin) policies:
                  NO cut in policy values
                  NO removal of bonuses
                  Reduction in bonuses from 1 Jan to 6%
                  MVA has always been 10% and still is

Guernsey policies (Dubai):
Under UAE legislation the original capital must be preserved.  i.e if the end result of policy value deductions and removal of bonuses etc. resulted in a loss on the original investment sum, the deductions would have to be adjusted to ensure the original investment amount was preserved.

SPECIAL NOTE: The Warren report (14 May) indicates that policy holders who have non-UK policies are 'ring fenced' against the impact of the GAR. 


The Guernsey Financial Services Commission are responsible for International policies, but members say that they have not had much support from them so far.