FTAdviser.com

Advertising

The Parliamentary Ombudsman will find the government guilty of maladministration over its handling of the near collapse of Equitable Life, according to a source close to the inquiry.

It is expected that Ann Abraham, the Parliamentary Ombudsman, will recommend that those who lost out should get compensation when the delayed report is finally published on 14 July.

A source close to the inquiry said that the matter may go to judicial review if the government does not accept the findings made my Ms Abraham.

Equitable Life closed its doors to new business in 2000 after it failed to find a buyer and was unable to fulfil its promises to policyholders.

Following this, the European Parliament announced that it would investigate whether the British government did enough to protect policyholders in January 2006.

The following year the European Parliament’s Committee of Inquiry published a draft report which said that the UK government should assume responsibility.

The life assurer sold off most of its operations, transferring most of the society’s fixed pensions to Canada Life in February 2007 and its £1.7bn-worth of with profits annuities to Prudential in December last year.

Despite the asset sales to the life companies, Equitable Life handed Charles Thomson, its chief executive, a pay package worth more than £1m.

Mr Thomson, hit the headlines last year when it was alleged emerged that he had supplied an inaccurate character reference to Equitable Life when applying for the position.

Mr Thomson was reprimanded by the Institute and Faculty of Actuaries for misconduct by bringing the profession into disrepute through the incident.

The Parliamentary Ombudsman began its inquiry into Equitable Life in July 2004.