* Government backs payout for Equitable Life policyholders
* Says payment scheme will be "swift, simple, transparent"
LONDON May 25 Equitable Life [EQL.UL]
policyholders who suffered heavy losses when the insurer nearly
collapsed a decade ago edged closer to long fought-for
compensation on Tuesday, as the new UK government promised an
independent payment scheme.
The coalition government brought into power earlier this
month said it would design a "swift, simple, transparent and
fair" payout plan, upholding compensation proposals made by a
parliamentary watchdog two years ago that could cost as much as
5 billion pounds ($7.2 billion).
The 2008 report by parliamentary ombudsman Ann Abraham
recommended payouts for more than a million policyholders who
lost pension savings, but the then Labour government said it
could not offer full compensation.
In a statement after the government outlined its legislative
agenda to parliament, including plans for an Equitable bill, the
Treasury said the compensation scheme would be designed by an
"I am very aware of the acute concern among policyholders
who have suffered loss and the desire to achieve redress
quickly," Mark Hoban, financial secretary to the Treasury, said.
For a report on the government's legislative programme, please
double click on [ID:nLDE64O0VZ]
For main government policies, click on [ID:nLDE64O0I8]
For reaction to government plans, click on [ID:nLDE64O1CS]
Abraham's investigation, published in 2008, found evidence
of maladministration of Equitable by regulators and the
government between 1988 and 2001.
She said the government should set up an independent
tribunal to calculate compensation for all policyholders. And
she said last year in a special report she was deeply
disappointed by the then government's decision not to compensate
all policyholders in full. [ID:nL5967777]
Equitable Life, Britain's oldest insurer with 1.5 million
policyholders at its peak, almost collapse after being forced to
honour unsustainable guarantees stretching back 30 years.
It eventually closed to new business, affecting more than a
million people who had each invested thousands of pounds for
(Writing by Clara Ferreira-Marques; Editing by David Holmes)