Equitable Life pleads with UK gov't to give full customer compensation

Compensation should be based on an estimated loss of between 4 and 4.8 billion pounds (US$7.42 billion) and should not be subject to a 400 million-pound cap proposed in an independent review in July, Equitable Life said.

Britain's Conservative-led coalition government plans to set out its plans to compensate Equitable Life policyholders as part of a wider review of government spending scheduled for Oct. 20.

The coalition has said it aims to implement a 2008 report by the parliamentary ombudsman which blamed Equitable Life's near-collapse in part on “serial regulatory failure,” and recommended that policyholders receive compensation from the public purse.

Equitable Life, Britain's oldest insurer with 1.5 million customers at its peak, came close to collapse after it was forced to honor unsustainable guarantees stretching back 30 years.

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