The Equitable Life Payment Scheme set up by HM Government has now paid over GBP970m to eligible Equitable Life policyholders who suffered financial losses as a result of maladministration, the HM Treasury revealed on Monday.
According to the UK government’s economic and finance ministry, it has ensured that fair and transparent payments have been made to customers of Equitable Life who suffered financial losses as a result of government maladministration, which occurred in the regulation of the insurance company between September 1992 and December 2000. Investors in Equitable Life who relied on the regulatory returns that were subject to government maladministration, are considered to have lost the opportunity to make a fully informed decision and they might have invested elsewhere if they had this opportunity.
Policy holders eligible for the Equitable Life Payments Scheme include those who hold, or have held, one or more of the following policies: Equitable Life Conventional With-Profits (CWP) policy bought between 1 September 1992 and 31 December 2000 inclusive; Equitable Life Accumulating With-Profits (AWP) policy (both individual and group scheme policies) that either started between 1 September 1992 and 31 December 2000 inclusive, or had at least 1 premium paid into it between 1 January 1993 and 31 December 2000 inclusive; and Equitable Life WPA (With-Profits annuity) policy bought between 1 September 1992 and 31 December 2000 inclusive.
The scheme has issued payments to a further 17,000 policy holders since April this year, which has resulted in more than 877,000 of 1 million eligible policyholders receiving payments.
A total of 407,141 payments have been issued to individual investors, totalling GBP547.6m. Initial payments have been made to 37,379 With-Profits Annuitants (WPAs) or their estates, totalling GBP81m and subsequent annual payments totalling GBP183m have also been issued. A total of 432,894 payments amounting to GBP161m have been made to those who bought their policy through their company pension scheme.
This scheme had previously been expected to close in April 2014. However in October 2013, the government extended the Equitable Life Payments Scheme to ensure that as many Equitable Life policy holders as possible receive the payments they are due.
HM Treasury added that the scheme will continue to trace and pay as many eligible policyholders as possible. All proportionate actions will be taken in order to locate the policyholders. Significant efforts have already been made, such as the use of extensive electronic tracing methods, writing to policyholders’ last known address, working with other government departments and liaising with group scheme trustees.
In addition, the government has also provided separate financial support to approximately 9,000 individuals who have With-Profits Annuities from the Equitable Life Assurance Society which commenced before 1 September 1992. With the assistance of the Prudential Assurance Society, payments of GBP5,000 were made to this group in December 2013. These payments amounted to around GBP46.8m.
Andrea Leadsom, Economic Secretary to the Treasury, commented: “I am pleased with the progress the Equitable Life Payment Scheme is making and am proud that the government is tackling the legacy of Equitable Life, helping over 877,000 Equitable Life policy holders with over £970 million worth of payments.”