Equitable Life

Former Equitable Life with profit policyholders will receive a further payment from the compensation system early next year.

The budget announcement confirms that those in receipt of either a guarantee or savings credit will be eligible.

The total pay-out is estimated to be £45M and applies to with profit policies bought between September 1st 1992 and December 31 2000. Average pay outs are reputed to be in the region of £800, clearly some payouts may be less than this.

This payment is the last planned payment for Equitable Life policyholders and hopefully brings to an end this sorry state of affairs. It was always difficult to compete with Equitable Life, their term insurance rates were astonishingly low, the projections on their pension with profits a work of fiction.

I do recall many years ago and two years prior to the insolvency of Equitable Life being asked to advise a prospective client on whether he should transfer his pension policies to Equitable Life. Naturally I carried out my research from public domain sources and from reliable industry contacts.

I stated that my research indicated that Equitable Life were “technically bankrupt” and that on no account should he should not transfer his policies to them.

I can remember what this poor chaps response was , “If you believe that a company as large as Equitable Life could go bankrupt Mr Best – I’ll waste no more of your time” and he laughed and laughed as he left my offices never to return.

If you recall the government of that time was judged to have been negligent in the administration and supervision of the insurer. As I am sure you are aware the government was forced to launch a “lifeboat operation” in order to prevent the complete loss of all assets for policyholders. The Department of Trade and Industry was severely criticised in the ensuing scandal.