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Equitable Life Assurance Society: Compensation

Treasury written question – answered on 24th January 2011.

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Photo of Fabian Hamilton Fabian Hamilton Labour, Leeds North East

To ask the Chancellor of the Exchequer what estimate he has made of the cost of paying compensation to those Equitable Life with-profits annuitants who started their annuities before 1 September 1992.

Photo of Mark Hoban Mark Hoban The Financial Secretary to the Treasury

With profits annuitants (WPAs) whose policies commenced before 1 September 1992 did so before any maladministration could have affected their investment decisions. Accordingly, they did not suffer a loss in respect of which any compensation would be appropriate.

The reduction in the levels of annuity payments that they have experienced is largely due to a combination of poor investment market performance, and the fact that early annuity payments were artificially high due to the structure of the product and over-bonusing.

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