What has the FSA done to protect Equitable Life policyholders since closure of the fund?
EMAG’s view: I’d like to examine the FSA’s visible behaviour in relation to the Equitable Life over the last seven months. Since the closure of the Society’s with-profits fund on December 7th, 2000 it was policyholders’ “reasonable expectation” that the FSA would be ultra-vigilant on their behalf. In reality, the FSA gave a false sense of security and this has cost policyholders dear. If the IFA had acted, billions could have been saved and confidence would not now be in tatters. At closure, Equitable’s with-profits fund was a big one, with nearly 27bn invested on behalf of a million policyholders. Because it is a mutually owned, smoothed with-profits fund, members were not privy to any financial detail. Since it was a direct-selling Society, few policyholders were aware of persistently paper-thin free asset ratio. There has never been the remotest chance that member/owners could exercise sway over their self-serving mutual board, in the way that institutional investors do every day wi
