EP Equitable Life committee questions proper implementation of community law

10.00.00am BST (GMT +0100) Mon 29th May 2006

Ahead of today's meeting of the Committee of Inquiry into the collapse of the Equitable Life Assurance Society, rapporteur Diana Wallis MEP said:

"Today's evidence should be particularly revealing in that we will hear from policyholders from different Member States who have either been prevented from leaving the troubled mutual, or have simply found themselves with no avenues for redress."

"This inquiry raises not only the particular concerns of the European citizens who are directly affected, but also much wider questions as regards the adequate functioning of the internal market for insurance products, the proper implementation of Community law and the adequacy of redress mechanisms available to citizens, in particular in cross-border situations where the regulator concerned is under home-country control."

The Committee will take evidence from two large groups of victims of the company's demise: firstly the Trapped Annuitants association, representing 55,000 annuity holders, and secondly the German policyholders association. The Committee will also hear Martin McElwee, author of a controversial pamphlet criticising the creation of an all-powerful Financial Services Authority in the UK. This will set the scene for the regulator itself to attend the meeting next month, accompanied by the UK treasury, two key players in the affair.

Previous evidence has put into doubt the "light touch" regulation of life insurance as operated in the UK, and has revealed a worrying lack of redress for policyholders, particularly in Member States other than the UK. These were largely left in the dark and were originally denied access to non-judicial forms of redress. Others who had access to such mechanisms took so long to get a proper response that they were then barred from pursuing any legal claims through the courts.