The U.K. Treasury said it will extend by four years the eligibility period for Equitable Life Assurance Society victims to claim compensation.
Treasury minister Liam Byrne said the government will now allow claims from 1991 instead of 1995 after the U.K. high court last week ruled the government failed to properly monitor the company’s bonus policy and make sure its reserves were adequate.
“The government has decided that, in the interests of speed and its wish to act fairly for policyholders, it will accept the findings,” Byrne said in a written statement to Parliament today.
The government should compensate Equitable Life policyholders affected when the insurer faltered in 2000 because the government and regulators failed to properly supervise it for a decade, the Parliamentary Ombudsman said in July. Last week’s hearing was a challenge to the Treasury’s rejection of some aspects of the report.
The Equitable Members Action Group Ltd. said in a statement after the ruling last week said the government will have to “greatly expand” the number of policyholders that are eligible to be compensated.
Equitable Life struggled to stave off collapse after the House of Lords, Britain’s highest court, ruled in 2000 it couldn’t abandon promises to policyholders to pay bonuses it could no longer afford. The ruling left the company with a 1.5 billion-pound hole in its accounts, forcing it to cut policy payouts to over 1 million customers in the U.K and more than 15,000 in other EU countries including Ireland and Germany.
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