Equitable claimants win more time for action

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The Independent Online

Equitable Life investors who claim they were mis-sold policies because they did not know they would bear the cost of paying guarantees to other policyholders have been given breathing space in their quest for compensation.

Equitable Life investors who claim they were mis-sold policies because they did not know they would bear the cost of paying guarantees to other policyholders have been given breathing space in their quest for compensation.

The beleaguered insurance company has agreed to a stand-still on the statutory time limits on starting legal action for compensation. The agreement covers policyholders who purchased a non-GAR policy between 1988 and December 2000, and who cancelled or transferred the policy prior to the February 2002 High Court approval of the deal which settled the GAR dispute. By leaving Equitable, such policyholders retained their right to sue.

A 500-strong group of these policyholders who believe they were mis-sold and suffered losses because of their exposure to the cost of guaranteed policies have hired law firms Irvin Mitchell and Class Law to sue Equitable for redress.

The cost of honouring policyholders with guarantees forced the company to close to new business last year.

The actuarial firm B&W Deloitte, on behalf of Equitable, is investigating whether non-guaranteed annuity policyholders have a case for compensation. Should B&W find there is a case for redress, Equitable has said it will put in place a compensation scheme that would eliminate the need for costly and lengthy legal proceedings.

Michael Napier, a senior partner at Irwin Mitchell, said: "We have now stopped the legal clock from ticking until March, when B&W will report. Without this, people would have been forced to litigate against Equitable, which is long and expensive. The chance for a compensation scheme would be much healthier for everyone."

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