By Jason Theodorou
The Government has been called on to make 'fair and transparent' compensation payments to Equitable Life policyholders, after Treasury Financial Secretary Mark Hoban said that the government sought to help those who 'lost out' on the payments.
Equitable Life stopped taking on new business in 2000 after losing a legal dispute in the House of Lords. The Equitable Members Action Group (EMAG) has pressed for the compensation of policyholders.
EMAG has said that compensation should be calculated using new terms of reference, rather than relying of the work of Appeal Court judge Sir John Chadwick. EMAG believe that policyholders could be owed up to £5 billion in compensation, while Chadwick's estimates are allegedly closer to £1 billion. He scaled down compensation payments because he believed that investors would have continued to make payments into the firm without knowledge of its financial straits.
Mr. Hoban has said that he wants to 'begin making payments in the middle of next year' to affected policyholders. The Government is expected to set up an independent commission to assess the level of compensation.
EMAG has said that the coalition Government has allowed 'obsolete and entirely inappropriate' terms of reference to survive the change in government in processing the compensation claims.
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