Penrose report 'deeply flawed', blasts former Equitable chief

Ray Ranson, the former chief executive of Equitable Life, who was heavily criticised by Lord Penrose over the near collapse of the insurer, has attacked the report as "flawed" and the judge's investigation as unfair.

Speaking for the first time since the report was published, Mr Ranson said: "Lord Penrose's report is enormously long and dense. It will be some time before I have read and absorbed it. The report is, from my perspective and my as yet incomplete understanding of it, deeply flawed in a number of respects."

The 817-page analysis, finally published last week, singled out Mr Ranson and his successor, Chris Headdon, for attack amid a general criticism of the management and regulation of the life company.

Mr Ranson was described by Lord Penrose as "manipulative", as having "dominated" the board of the company and as having failed to "provide regular and adequate information to the board about the business risks inherent in the general actuarial management of the society". He is already being sued by Equitable and now faces possible criminal prosecution by the Serious Fraud Office.

As revealed by The Independent on Sunday last year, the SFO is considering whether to proceed with a full investigation into Equitable on the basis of what has been unearthed by Lord Penrose.

It said that the focus of its interest was "whether the adoption of a differential bonus policy was communicated to policyholders and prospective policyholders".

The Penrose report states that the differential bonus policy, which was aimed at giving new policyholders a less favourable deal than existing ones, was agreed upon in 1983 and was in effect from July 1987, but "the policy was not disclosed to policyholders by direct communication, in any way, until 1996". Lord Penrose described this as a "serious omission in communication".

Mr Ranson was described by Lord Penrose as having become the "single most powerful executive in the company" by the late 1970s and early 1980s. In 1982, he became the appointed actuary - the person responsible for calculating bonus rates and liaison with the regulators. He became a director in 1985 and chief executive in 1991.

Mr Ranson retired in 1997, becoming a director of Marks & Spencer's financial services business, before retiring from that post last year.

Mr Ranson, 72, has refused to be interviewed since the Penrose report appeared, but sent an emailed statement to The Independent on Sunday.

In this, he attacked both the Penrose report and the former judge's methodology. He was particularly angry about the way in which Lord Penrose said that Mr Ranson had declined to "comment on some of the matters put to him".

In reply, Mr Ranson said: "I felt duty bound to co-operate fully with the Penrose inquiry and chose to attend interviews on my own and without the benefit of legal support in order to feel free to respond as fully as possible. In this process the questioner has all necessary resources and the witness has to rely on his memory of matters going back years, if not decades.

"It is not in any sense an equal contest and I find it regrettable that Lord Penrose has called into question my willingness to assist the inquiry when, in fact, I did my utmost to co-operate."