An independent commission has recommended the Treasury should pay the £775 million compensation earmarked for Equitable Life victims to the oldest policy holders first.
The recommendations, from the Treasury-appointed Independent Commission on Equitable Life payments, would mean the 945,000 policy holders affected by Equitable's near collapse would receive 24% of their relative losses.
The Treasury should also write off compensation for 100,000 policy holders who would be entitled to less than £10, according to the commission, chaired by Brian Pomeroy.
It recommended the Treasury offset relative gains and losses for victims that have more than one policy, and that the oldest policy holders and the estates of deceased Equitable Life members should be the first to receive compensation.
The government accepted the findings of the commission and will publish plans for the compensation scheme in the spring. ‘We have always been committed to making fair and transparent payments to Equitable Life policyholders, through an independently designed payment scheme, for their relative loss as a result of regulatory failure,’ said Mark Hoban MP (pictured), financial sectary to the Treasury.
‘I am grateful for the work the Commission has done to establish policyholders’ concerns and have used this to recommend the principles of the payment scheme. I welcome their recommendations and we will now use them as the basis for making payments to policyholders,’ said Hoban.