19 October 2002 - A message from retired solicitor Nicholas Oglethorpe on Unit Linked Policies

1. The Baird Report makes it clear that the unit-linked policies are liable to reduction to meet the wider liabilities of Equitable.

2. Halifax has been paid a reassurance premium for taking over responsibility for those policies.

3. Halifax has said that the assets backing those policies are safe in its hands, as they certainly are.

4. Halifax has been very careful not to say that it would be responsible for paying out on unit-linked policies in the event of a Liquidation of Equitable. They are wise, because it would be arguable in that event that to do so would be a breach by Halifax directors of their duty to Halifax shareholders.

5. If Equitable were to go into Liquidation, the Liquidator could go privily to the Court as an emergency and ask for the assets in the hands of Halifax representing the unit-linked policies to be frozen, so that he could ensure that such assets bore their due proportion of the pain and expense of the Liquidation.

Extract taken from a posting to the Motley Fool Equitable discussion board. Click here to access the original.