Eligible policyholders with Equitable Life, the beleaguered life assurance company that lost its customers over £4 billion through mismanagement and poor regulation, will begin to receive compensation from the end of June 2011 in line with a 3-year payment programme.
Hundreds of policyholders will receive cheques in the coming weeks at the start of a 3-year payment programme which will eventually pay about £1.5bn to just under a million policyholders. It will cover the full losses suffered by eligible With-Profits Annuity policy holders, while the remaining eligible policyholders will receive a pro-rata share of the £775 million set aside for them in proportion to the size of their losses. The scheme aims to contact all eligible policyholders directly before June 2012.
In line with the Independent Commission on Equitable Life Payments’ recommendations, the scheme will be prioritised by age, addressing the oldest and the estates of deceased policyholders first.
Mark Hoban, Financial Secretary to the Treasury, said ‘After a decade of delay and indecision, I am delighted that today we’re beginning to send out cheques to eligible Equitable Life policyholders. We will pay out £1.5 billion to ensure that policy holders receive the justice they deserve.’
Which policies are eligible for the Scheme?
- Equitable Life Conventional With-Profits policies bought between 1 September 1992 and 31 December 2000 inclusive
- Equitable Life With-profits Annuities bought between 1 September 1992 and 31 December 2000 inclusive
- Equitable Life Accumulating With-profits policies (both individual and Group scheme policies) that either started between 1 September 1992 and 31 December 2000 inclusive or had a premium payment payment made into it between 1 January 1993 and 31 December 2000 inclusive.
When will payments begin?
According to the Equitable Life Payment Scheme all eligible Equitable Life Accumulating With-Profits and Conventional With-Profits policyholders will receive a payment by mid 2014 at the latest. Eligible With-Profits Annuity policyholders will receive their first payment by June 2012.
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