Govt accused for missing Equitable warning signs

Parlimentary Ombudsman Ann Abraham launched a broadside attack on the
Government yesterday, accusing it for being too slack in its regulation of
Equitable Life to heed
warning signs which brought UK’s oldest insurance mutual close to disaster.

She was giving evidence to the
Public
Administration Select Committee which has started an examination of her
damning report released last July, which accused regulators – the Department of
Trade and Industry, the Government Actuary’s Department, and Financial Services
Authority, acting on behalf of the Treasury – for being guilty of ‘comprehensive
failure’, The Daily Telegraph reports.

Comparing Equitable to a ship about to go over a waterfall, she made a
stinging attack of Government regulators, saying they were ‘mesmerised’ by the
society and watching a disaster occur before its near-collapse in 2001.

‘Here was a long-established, extremely well thought of, highly successful
society that had been that way since anybody could remember,’ she told the
committee. ‘Somehow, although the stark facts were in front of them, they
couldn’t quite believe it. There was a sort of sense that “somehow it will come
right”.’

Further reading:

JDS costs soar after Equitable case

E&Y faces penalties for Equitable Life role

Read
The Daily Telegraph story