European Parliament Approves Committee To Probe Equitable Life

by Ulrika Lomas, for LawAndTax-News.com, Brussels

23 January 2006

The European Parliament last week approved the establishment of a committee of inquiry to look into the case of the British insurance company Equitable Life.

Over a million UK policy holders and more than 15,000 policy holders in other EU countries, notably Germany and Ireland, incurred major losses to their pensions, savings or investments following alleged mismanagement at Equitable Life. The question has arisen as to whether the relevant EU legislation was properly applied in the UK.

The committee has been established as a result of a petition presented to the Parliament in September 2005 by the Equitable Members Action Group (EMAG), a group of policy holders who had lost savings as a result of Equitable's actions.

Paul Braithwaite of EMAG stated last week that he was "delighted" with the EP decision.

The committee's draft mandate requires it to investigate the way in which the UK authorities applied the relevant Council directives, examine whether the European Commission properly monitored the transposition of Community law and assess allegations that UK regulators consistently failed to protect policy holders by rigorous supervision of accounting and provisioning practices and of the financial situation of Equitable Life.

The 22 member committee will have twelve months to complete its work and submit a report to Parliament. An interim report will be delivered after four months.

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