E&Y spared grilling over Equitable
Ernst & Young has defended its role in the Equitable Life crisis in a submission to the Commons Treasury select committee, but looks likely to escape a public grilling if the government calls a spring election.
The news emerged as the select committee began preparing a report on the Equitable collapse after quizzing Sir Howard Davis, head of the Financial Services Authority.
Ernst & Young has submitted a written testimony over its role as auditor to the troubled life insurance company, but is unlikely to be called to give public evidence in front of the committee due to a lack of time.
The E&Y submission is understood to focus on what it sees as the role of the auditor and highlights the unpredictable outcome of the Lords’ ruling over guaranteed annuities for Equitable policy holders.
The select committee, chaired by Giles Radice MP, has not ruled out ordering the auditors to appear in front of it, but it will want to produce its report before the end of the parliamentary session otherwise its work will expire if parliament is dissolved for an election.
Equitable Life ceased to write new business in December after it revealed liabilities of £1.5bn following a Lords ruling that a decision to cut terminal pensions bonuses to holders of guaranteed annuity rate policies was illegal.
E&Y could still face investigation by the ICAEW after the institute decided to examine the role of its members in the affair. Although at present the scope of the inquiry is unknown, it is likely that any investigation will include E&Y.
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Equitable Life probe to include auditors