National regulators 'complacent' over Equitable Life
National regulators within the European Union (EU) have been accused of complacency and a failure to co-operate with one another in the wake of the near-collapse of British insurance company Equitable Life.
The head of a European parliamentary inquiry, which is investigating how thousands of people across Britain, Ireland and Germany saw their retirement savings slashed as a result of the debacle, yesterday claimed that affected Equitable Life policy holders had been "sent from pillar to post" in attempting to seek redress for their losses.
In a European parliament debate British Liberal Democrat MEP Diana Wallis said a "ping pong game" between Equitable Life's home regulator in the UK and host country regulators in Ireland and Germany had failed to help the insurer's policy holders outside Britain.
While some one million Equitable Life policy holders in the UK were affected by the near collapse of the insurer in 2000, around 8,000 people in Ireland and 4,000 in Germany also saw their savings hit by the financial scandal.
In the debate in Strasbourg, France, author of the European parliament's interim report into the fiasco Ms Wallis described the subsequent loss of pension investments as a "disastrous personal event for thousands of EU citizens".
As part of their inquiry MEPs are examining whether the UK properly implemented EU law to ensure that the insurer was subject to effective regulation and whether the loss caused to Equitable policyholders across the EU was caused by a failure to adequately regulate the insurer.
The European parliament committee which is carrying out the investigation last month announced that it needed more time to complete its inquiries, with MEPs not now expected to publish their final report until after a separate investigation by Britain's parliamentary ombudsman is completed in November.
Looking ahead, EU internal market commissioner Charlie McCreevy yesterday told MEPs that planned reforms to modernise insolvency rules for insurance companies across the bloc would protect policy holders better in the future.
Solvency II rules would introduce a "harmonisation of supervisory practices to contribute to avoiding this kind of crisis happening again," Mr McCreevy said.
The near collapse of Equitable Life, the world's oldest insurance company, occurred after the troubled insurer announced that it was unable to honour pension pledges made to some of its policyholders.