UK - Beleaguered insurer Equitable Life is planning another compromise scheme for guaranteed annuity rights' members to stave off further legal action.
The move follows a report by consulting actuary B&W Deloitte which set out how much the insurer might have to pay in compensation to policyholders who left Equitable before the start of the year to retain their right to sue.
Equitable Life chief executive Charles Thompson said: “We have always recognised that there are certain groups of policyholders who may have suffered financial loss as a result of the GAR issue if they were mis-sold their policies.”
This had now been confirmed by the report from B&W Deloitte and two Queen’s Counsels – Christopher Carr and Gabriel Moss – commissioned by the insurer.
Equitable estimates that around 70,000 former policyholders may fall within the scope of a proposed compromise scheme and that the total level of compensation could be in the range of £40m to £75m.
Equitable has set aside up to £120m for potential mis-selling claims.The report and legal opinion follows press reports that Equitable Life has drawn up plans for placing itself into administration and that it was in breach of its minimum solvency margins.
The insurer denied these reports and said it has not drawn up plans for putting itself into administration and that it is and always has been solvent – under the rules on the required minimum margin.
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