MEPs to probe near-collapse of Equitable Life

A YEAR-LONG investigation into the near collapse of the insurance company, Equitable Life, will be carried out by a European Parliament committee.

About 6,500 Irish people were among the one million policy holders who lost close to €2 billion in pensions, savings and insurance five years ago.

Ireland East MEP Mairead McGuinness and Dublin MEPs Proinsias De Rossa and Gay Mitchell are expected to be on the 22-person committee, while Ms McGuinness is a contender to chair the group.

The committee of inquiry will look into “matters linked to the insurance company Equitable Life and in particular allegations concerning the absence of relevant rules and of the implementation and application of EU legislation in the field of insurances, resulting in heavy losses (savings and investments) suffered by over a million Europeans.”

Ms McGuinness said: “The Equitable Life case raises huge questions over the effectiveness of the regulatory framework at EU level and this is one of the main issues that the new Committee will address.

“Emag (Equitable Life Action Group) has fought tirelessly to have this issue properly addressed through UK channels and have come to the European Parliament because the issue is a pan-European one of protecting consumers.

“So far investors have been given little hope with the European Commission encouraging them to resort to the courts.”

Investigations are expected to take a year after which the committee will present its final report. It will make an interim report after about four months.

Among the issues are whether the relevant EU legislation was properly applied in Britain; whether the European Commission properly monitored the transposition of Community law; assess allegations that British regulators consistently failed to protect policy holders by rigorous supervision of accounting and provisioning practices and of the financial situation of Equitable Life.

The committee has the power to investigate the implementation of EU law and can invite the commission or national governments to testify at its hearings as well as provide documents.

This will be the fourth major investigation into the debacle surrounding the former mutual.

The Equitable Members Action Group petitioned the European Parliament to establish its own inquiry as they claim the British reports were biased in favour of the government.

Equitable Life refused to take any new business in December 2000 after the House of Lords insisted it must honour guarantees on policies it sold in the 1970s and 1980s.

The decision left the firm with about €2bn debt. It sold its ongoing business to Halifax in 2001 and took action including penalty charges to dissuade clients withdrawing their money.