Tory grills PIA chief over pensions mis-selling backlog
Tuesday 11 March 1997
Joe Palmer, the chairman of the Personal Investment Authority (PIA), was given a grilling by Quentin Davies, a senior Tory member of the Commons Treasury select committee, which is expected to lead to a highly critical report.
Collett Bowe, chief executive of the PIA, said the board had confidence in Mr Palmer's chairmanship, whose appointment was criticised by the committee two years ago.
But Mr Davies said he was "astonished" by the PIA's failure to make more progress. His criticism could undermine the Government's efforts to put Labour on the defensive in the Commons on Thursday with a full- scale debate on Social Security Secretary Peter Lilley's plans for privatising the state pension system.
Sir Andrew Large, head of the Securities and Investments Board, was summoned last week by Angela Knight, a Treasury minister, to the Treasury to be told to end the "foot-dragging" over the payment of compensation to those who were wrongly advised to take out private pensions in the 1980s.
Ms Knight is reported to have warned that criminal charges could be laid against some of those responsible for mis-selling pensions.
But Ms Bowe indicated that prosecutions were not the priority. She said under the law, they had to find "proof of guilty intent or recklessness" to prosecute. "Our entire effort is focused on what for us as an investment protection agency is the bottom line."
Ms Bowe, a former government chief press officer at the Department of Trade and Industry , told the committee the total number of cases for review was over 558,000 of which 478,000 were in priority categories set by the Securities and Investments Board. She told Mr Davies that until the review was complete, she could not say how many cases of mis-selling had happened. But she said 37,000 cases had been completed, of which 11,000 had led to redress. In a total of 7,000 cases, compensation had been accepted. A total of pounds 80m had been offered in compensation and pounds 61m had been paid.
The committee two years ago attacked the appointment of Mr Palmer, a former head of the Legal & General, for a possible conflict of interests.
Mr Palmer defended his appointment, in spite of the disclosure - read out in the committee - by The Independent that Legal & General was among the "worst offenders" of insurance companies, with a long backlog of claims for mis-selling.
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