THE EQUITABLE LIFE ASSURANCE SOCIETY

'The Equitable Life Assurance Society' ('Equitable Life'), founded 1762, is a life insurance company in the United Kingdom. It nearly collapsed in 2000 and had to cut the pensions and retirement savings of its policyholders to stay afloat. This caused a large public outcry.
The UK government's Treasury commissioned Lord Penrose to lead an inquiry into Equitable Life, which took two and a half years to complete. His 818-page report^[1], published on 8 March 2004, found that the company made over-generous payouts to policyholders and was therefore the "author of its own misfortunes".
In the light of Penrose's findings, in April 2005 Equitable Life launched a £4 billion legal action in the High Court. It is claiming £2 billion from 15 ex-directors who it claims were negligent in their duties, a charge they deny. It also demands a similar sum from its former auditors, Ernst & Young, claiming that they signed off the company's accounts without warning of the problems that led to its collapse. However, Ernst & Young say they could not have told the society anything it did not already know.
On 22 September 2005, Equitable Life decided to abandon its claim against Ernst & Young and made a payment to the auditors in respect of costs.

Contents

References

See also

External links

References

1. Penrose Report

See also

★ Life assurance

★ With-profits policies

★ List of notable business failures

External links

★ Equitable Life

★ BBC News: Where Equitable Life went wrong

★ Memorandum by Cazalet Financial Consulting to the House of Commons (2001)