"Financial Services Authority made mistakes with Equitable Life" – Davey MP raises Equitable Life’s members’ concerns during Treasury Select Committee Local Lib Dem MP, Edward Davey, won an admission of fault from the Chief Executive of the Financial Services Authority (FSA), Sir Howard Davies, over their monitoring of the Equitable Life’s problem during a recent Treasury Select Committee. Equitable Life has encountered financial difficulties in the past year after members with Guaranteed Annuity Rates (GAR) undertook a successful court action against the company. The action was taken after GAR members were denied bonus payments made to other members. The court ruling means bonuses will have to be paid to GAR policy-holders. Unfortunately, as Equitable Life was not insured against a successful court action, these bonuses are to be paid for by using saving of other policy holders funds. For many members, this will reduce the value of their investments by thousands of pounds. Commenting on his cross examination of the FSA, Edward Davey said, "Equitable Life members from across the country have been in touch with me. For many, this saga could take thousands of pounds off the value of their fund." "The Board of Equitable Life have correctly resigned. However, the Treasury Select Committee hearing was a valuable opportunity to examine the Financial Services Authority and their role in this affair. "The FSA are responsible for regulating this industry and they would have been aware of Equitable Life’s precarious position. I believe they should have done more to protect investors. "In my cross-questioning, Sir Howard Davies admitted for the first time that the FSA had miscalculated and made mistakes. As a member of the Select Committee I will be looking at the question of compensation on the back of this admission. " |
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