Equitable Life Payment Scheme
Mark Hoban (Financial Secretary, HM Treasury; Fareham, Conservative)
The Treasury can confirm that the Equitable Life payment scheme has written to approximately 90% of all eligible individual policyholders to inform them of their status within the scheme, and that payments have been made to 288,823 policyholders. In addition, the scheme has today published a further progress report, which can be found at: http://equitablelifepaymentscheme. independent.gov.uk/ and I have arranged for a copy to be placed in the Libraries of both Houses.
In the coalition agreement published in May 2010, the Government pledged to
“implement the parliamentary and health ombudsman’s recommendation to make fair and transparent payments to Equitable Life policy holders, through an independent payment scheme, for their relative loss as a consequence of regulatory failure”.
To honour that pledge the Government announced in October 2010 as part of the spending review that £1.5 billion would be made available to the scheme for distribution to up to 1 million eligible policyholders, and passed the Equitable Life (Payments) Act to establish the scheme. The Government met their commitment to start making payments by June 2011 and high volumes of automated payments were being made by December 2011.
In order to lessen the burden on policyholders, the scheme contacts policyholders directly with payment and there is no requirement to “make a claim” to receive a payment from the scheme. Therefore, the scheme committed to contact all the individual (i.e. non group) policyholders it could by June 2012 so that they knew their status within the scheme. This letter would either:
inform of a nil payment;
inform them that they would be paid by April 2014 and the amount of any payment due.
In the previous progress report, published in January 2012, the scheme reported that 95,000 policyholders had received payments totalling £77 million. The scheme can confirm today that 288,823 policyholders have received payments from the scheme totalling £277,727,668. This means that nearly two-thirds of all individual policyholders due a payment from the scheme have received it. Additionally, around 75% (27,671) of with-profits annuitants have now been contacted by the scheme about their first year payment, 25,215 of whom have received payment.
inform of nil payment;
request further address verification in advance of making payment;
inform of eligibility within the scheme.
There is a group of individual (i.e. non group) policyholders for whom the data processing work to determine the payment status of their policies is ongoing. This means that while the scheme cannot confirm the amount of any payment due at this stage, the scheme can confirm their eligibility for the scheme.
The scheme has written to these policyholders to confirm their eligibility, that the data processing work is ongoing, and that any payment due should be made no later than April 2013. These policyholders need take no further action as the scheme has all the data it requires to confirm their payment status within the scheme and will be writing to them again in due course.
Following receipt of payment, the scheme has continued to receive low levels of response from policyholders—less than 0.25% of eligible policyholders have complained to the scheme. In addition, the scheme has established an independent process to assist those policyholders who are dissatisfied with any complaint response from the scheme.
As stated in June 2011, there are additional complexities in retrieving the contact details of those policyholders who bought their policy through a group (i.e. company) scheme. The scheme can confirm that it has begun the process of contacting group scheme trustees to obtain policyholder’s address details. Payment to these policyholders will start in the coming months.
The scheme can also confirm that hundreds of payments have already been made to the estates of deceased policyholders, and the process of identifying, tracing and contacting the estates of deceased policyholders continues. As this is an understandably complex area with some cases going back many years, this verification work will continue during 2012 and throughout the duration of the scheme. Payments to the estates of deceased policyholders are being made on completion of this tracing process.
Over the coming months the scheme will continue to make payments to policyholders and to contact the trustees of group schemes so that their eligible members can be paid.
The end of the first year of the scheme marks a significant milestone in the life of the scheme, and bringing closure to the Equitable Life issue. Eligible policyholders who have not yet heard from the scheme should contact the scheme via its call centre on: 0300 0200 150. The scheme will then be able to advise of the next steps a policyholder should take to receive further details on their status within the scheme.