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Equitable Life Payment Scheme

Volume 558: debated on Tuesday 5 February 2013

The Treasury can confirm that the Equitable Life payment scheme has made £535 million in payments and has paid nearly 80% of eligible individual policyholders. In addition, the scheme has today published a further progress report, which can be found at: http://equitablelifepaymentscheme.

In the coalition agreement published in May 2010, the Government pledged to

“implement the Parliamentary and Health Ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure.”

As of 31 January 2013 the scheme has paid nearly 80% of eligible individual policyholders with 370,867 policyholders receiving payments totalling £535 million. Payments to all the individual policyholders the scheme can trace are on track to be completed by April 2013 as planned.

Following receipt of payment, the scheme has continued to receive low levels of response from policyholders. The vast majority of policyholders continue to cash their warrants without further recourse to the scheme with 0.8% of eligible policyholders having complained to the scheme.

As stated in the last report, there are additional complexities in retrieving the contact details of those policyholders who bought their policy through a group (i.e. company) scheme which mean that payments to these policyholders are in a later phase of the scheme. The scheme has now written to the trustees of all 5,700 eligible company schemes and as a result of this payment to these policyholders will accelerate from April 2013.

The scheme has also confirmed that the estates of 5,760 deceased policyholders have been paid and the process of identifying, tracing and contacting the estates of deceased policyholders continues. As this is an understandably complex area with some cases going back many years, this verification work will continue over the coming months.

The Government are committed to drawing a line under the Equitable Life issue and the scheme remains on track to close as planned in 2014. As part of this closure process the scheme will publish more regular reports with the next one due to be published in early May 2013.