Ombudsman 'certain' to re-open inquiry into Equitable Life scandal

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The Parliamentary Ombudsman, Ann Abraham, appears certain to reopen her inquiry into Equitable Life after it was revealed yesterday that the Public Administration Select Committee, which the Ombudsman reports to, was the latest body to have written to her requesting a further investigation.

In a recent letter to Ms Abraham obtained by the Equitable Members' Action Group (Emag), Dr Tony Wright, the committee chairman, said that given Lord Penrose's scathing criticism of the Government Actuary Department (GAD) and Equitable's regulators, there was a case for "investigating potential maladministration". He said the new inquiry should encompass the same period as the Penrose report, and should be kept as broad as possible, adding that any judicial problems over extending the Ombudsman's remit to investigate the GAD should be cleared up as quickly as possible.

Ms Abraham wrote to MPs at the end of April, two months after the publication of Lord Penrose's report into the troubled life insurer, to ask whether her inquiry should be reopened. She is believed to have had responses from more than 250 MPs and more than 1,500 Equitable policyholders.

The Ombudsman has said it will make its decision before Parliament's summer recess on 22 July.

A spokesman for Equitable Life said: "We welcome Tony Wright's directions to the Ombudsman and we now believe it's a no-brainer that the inquiry will be reopened."

Emag also welcomed the news but criticised the Treasury Select Committee for not also making a submission. Paul Braithwaite, Emag's general secretary, said: "[The letter] unequivocally recommends Ann Abraham to reopen her study on Equitable Life, to consider the entire period of the Penrose inquiry and to seek to draw on Lord Penrose's personal knowledge. Further, it offers his committee's assistance in obtaining the necessary changes to legislation.

"Emag, on behalf of the million plus policyholders, remains optimistic that Ann Abraham will now bow to the will of parliamentarians and the 2,000 written submissions and embark on a comprehensive new inquiry, superseding the existing much criticised narrow study."