Equitable'spay-out call to Penrose

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The Board of Equitable Life yesterday called on Lord Penrose, the author of a damning report into the downfall of the society, to join forces with the Parliamentary Ombudsman to decide whether policyholders should be compensated.

"The report appears to highlight a catalogue of failure by the regulatory regime," Charles Thomson, the chief executive of Equitable, said yesterday. He urged the ombudsman to reopen her investigation into the role of regulators in supervising Equitable. "We believe the Parliamentary Ombudsman should ask Lord Penrose, who has spent two years investigating the facts, to advise her on whether there was maladministration and whether she should recommend compensation," said Mr Thomson.

Lord Penrose was commissioned to examine the events that led to Equitable's near collapse but was not given leave to apportion blame or assess whether compensation is liable. The Government published his report on Monday and ruled out compensation, but as a picture of poor regulation emerges from the report, pressure is growing on the ombudsman. Conservative and Liberal Democrat MPs are pressing for her to re-examine the case in light of Lord Penrose's view that the "regulatory system has failed policyholders".

The board believes the "fastest route to redress" is through the ombudsman, as a court case against the Government would be lengthy and expensive. But Mr Thomson said he would consider requests from policyholders who want Equitable to fund a suit against the Government. "The issue is not necessarily who funds an action, but whether there is a credible, cost effective and sustainable case in the interests of policyholders to assert," he said.