Equitable Life Scheme Design Document
(13 years ago)
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The Financial Secretary to the Treasury (Mr Mark Hoban)
The Treasury has today published the Equitable Life payment scheme design document.
The publication of the design document is a key step towards delivering the Government’s pledge of May 2010 to
“implement the parliamentary and health service ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure”.
The document sets out the detail of the scheme design, including:
the scheme rules;
the scheme administration and timetable;
the methodology behind loss and payment calculations;
the scheme’s approach to making payments;
the details of the queries and complaints procedure; and
the plans for communicating with policyholders.
Fairness, transparency and simplicity have been the guiding principles behind the Government’s approach to designing the scheme. The final design reflects these principles, as well as the actuarial analysis carried out by Towers Watson, the evidence and arguments received in response to the Government’s call for representations following the publication of Sir John Chadwick’s advice, and the recommendations of the Independent Commission on Equitable Life payments.
The scheme also reflects previous announcements that with-profits annuity policyholders will have their losses covered in full, and that scheme payments will be free of tax and will not affect eligibility for tax credits.
The Government have previously stated their ambition to make the first scheme payments by the middle of this year. They remain on track to do so, with plans to make the first payments before the end of June. Policyholders will not need to do anything to claim their payments—the scheme has policyholders’ details from Equitable Life and the Prudential and will contact policyholders in the first instance.
Copies of the paper are being placed in the Libraries of both Houses and are available via the Treasury website.