EQUITABLE LIFE MEMBERS

International Policyholders

Good News for Equitable Losers

Good news for Equitable losers - 19 May 2003
by Harry McRandle

EQUITABLE Life has accepted that the UK financial ombudsman has the power to act on behalf of claimants sold assurance policies through Guernsey.

The news will be welcomed by hundreds of policyholders based in the island and overseas who are claiming millions of pounds against the beleaguered insurance giant.

They have been awaiting a decision for many months about whether the UK's Financial Ombudsman Service had jurisdiction to act on their behalf.

The decision is also good news for the Guernsey Financial Services Commission. It was strongly criticised recently by Margaret Felgate, a Spanish-based investor speaking on behalf of a group of policyholders, for failing to take action.

The policyholders who were sold with-profits policies through Guernsey were previously caught between something of a rock and a hard place.

As previously reported in the Guernsey Press, because the policies were sold through Bacon and Woodrow's offices outside the UK, Equitable Life was not prepared to accept that the FOS had jurisdiction.
At the same time, the GFSC believed it did not have the power to intervene because only an administrative function was carried out in the island.

However, a spokesman for the FOS said last week that apart from finalising a few details, the principle had been accepted by Equitable Life that the FOS had jurisdiction over the Guernsey claims.

But the spokesman said that all claims would be reviewed on a 'case by case' basis and it may be that some will fall outside the basis on which jurisdiction is accepted.

'If it is established that financial advice has been given to any policyholder from Guernsey, then these cases may be excluded,' said the spokesman.

But the good news is that some of the Guernsey policyholders - who include GFSC director-general Peter Neville - may have their claims added to 'the lead-case scenario'.

The FOS is already pursuing compensation for many thousands of UK-based claimants who accuse Equitable of, among other things, mis-selling of policies.

'If any of the Guernsey cases can be attached to the lead-case scenario, then I would imagine that is the course of action likely to be taken,' said the FOS spokesman.