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Equitable Members Action Group
Equitable Members Action Group Limited, a company limited by guarantee, number 5471535 registered in the UK
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Vital Reports: 09/07/2004 - The select committee on Public Administration asks the PO to look again
Ms Ann Abraham
Thank you for your letter of 22 April inviting the Committee's views on whether you should carry out a further investigation into the regulation of Equitable Life and if so in respect of which period and matters. You said in evidence to the Committee that you would consider whether to carry out any further investigation once Penrose had reported and we welcome the extensive consultation you are currently undertaking.
Lord Penrose concluded that the main thrust of his criticism was, "that for the most part it was the system that failed to provide the regulation that changing circumstances in the industry required, not that there was failure to implement what was fundamentally a satisfactory system" (Chapter 20, para 69). Nonetheless he prefaced that conclusion by stating that in the report he had been "critical of the regulatory system, and on occasion critical of the performance of the regulators and their advisers". Moreover his eleventh key finding was that, "There was a general failure on the part of the regulators and GAD to follow up issues that arose in the course of their regulation of the Society, and to mount effective challenge of the management" (Chapter 19, para 240) . This suggests there is a prima facie case for investigating potential maladministration.
Therefore it seems to us that:
Firstly you should now carry out a further investigation. The investigation should encompass the same period covered by the Penrose report. The scope of that investigation should also be as wide as possible in terms of the bodies to be examined.
Secondly you should begin by setting out the limits of your jurisdiction as you understand them to be. In your evidence to us on 27 November we discussed some of the difficulties surrounding your ability to pursue maladministration leading to injustice and possible redress in a context where both some of the bodies and conduct of business regulation were not under your jurisdiction. We assume your limitation primarily involves the Government Actuaries Department (GAD).
Thirdly and consequently you should also set out clearly what extension to your jurisdiction you would need to ensure that you are not hampered needlessly by jurisdictional issues. The Committee, as no doubt others in the House, would support your approach to Ministers to ensure speedy passage of the necessary secondary legislation amending Schedule II of the Act as appropriate.
Fourthly when embarking on your investigation you should also make clear a) the criteria under which you are required to undertake your investigations and b) the extent to which, subject to any findings of maladministration and injustice, you are able to recommend redress and the nature of that redress.
Fifth you reminded us in your evidence of 27 November about the difficulties you and your predecessor faced in looking at all the events and all the parties involved and why Sir Michael Buckley advocated a full inquiry covering al the issues. In light of this it is important that your further investigation should be undertaken with the cooperation and assistance of Lord Penrose who has had the benefit a comprehensive inquiry.
Lastly when you last came before the Committee your ability to give evidence with regard to Equitable Life was circumscribed by the judicial review hearing. Now that you are consulting on the way forward on Equitable Life, I am extending an invitation to you to discuss with us how you plan to take this forward and, more broadly, how these sorts of inquiry should be conducted in future and the implications this may have for your Office.
Tony Wright MP