Hoban defeats extra Eq Life payments

Thousands of Equitable Life victims who annuitised before 1992 will receive no compensation despite a proposed amendment to include them in the government’s repayments package.

After several hours' debate in the House of Commons this afternoon, MPs voted to reject the amendment from Labour MP Fabian Hamilton to compensate 10,000 Equitable with-profits annuitants who bought their policies before 1992.

A total of 301 MPs voted against the amendment, whilst 76 voted in favour, after a speech from Treasury secretary Mark Hoban rejecting many of the claims put forward in the amendment.

Hoban said Equitable Life paid out more to pre-1992 with-profits annuitants than they would have done if there was no maladministration. He said it overpaid these policyholders' bonuses throughout the 1990s, only cutting the annuities in 2003.

"The plight of the with-profits annuitants is not what it appears to be," said Hoban.

Hoban countered claims the Treasury cannot calculate compensation for pre-1992 annuitants, as was suggested earlier by Tory MP Jonathan Evans.

The secretary said a formula for calculating this had been included in the Chadwick report, but since this report was "rubbished" by the Opposition and "no alternative was brought forward", the formula was largely ignored.

He added the Equitable Life compensation package is for the period in which maladministration occurred. This was judged to have been from 1992 onwards and so would not cover anyone who bought annuities before that year.

Hamilton argued regulatory failure after 1992 still affected people who annuitised before 1992, as they have been locked into annuities with decreasing payouts ever since, but with little success.