The FT today says that policyholders not told about the scale of Equitable Life's liabilities before...
The FT today says that policyholders not told about the scale of Equitable Life's liabilities before taking out policies could be up for compensation following a legal deal between the company and lawyers representing 500 former policyholders.
The deal means that litigation will be halted until an independent report into their claims is published this autumn.
The Law firms involved are Irwin Mitchell and Class Law, who brought the case on behalf of policyholders not told about Equitable's £1.1bn liability to pay guaranteed annuity rates when they bought non-GAR policies between 1998-2000.
The Times says that the review under the guidance of the FSA will be carried out by actuary B&W Deloitte.
If it finds evidence of mis-selling, then policyholders with valid claims will get compensation, The Times says.
It adds that Irwin Mitchell is still intent on pursuing litigation, although the law firm hopes that the independent review will confirm its view of the matter.
Royal & Sun Alliance stunned many with its announcement yesterday that it was going to take an axe to its life business, including removing half the current workforce.
The FT today says that some of the biggest shareholders in the company are likely to seek the dismissal of chief executive Bob Mendelsohn following yesterday's 22% share price plunge.
Shareholders say that his going will be the price of supporting the company's rights issue, flagged up yesterday to take place next year.
Chairman Patrick Gillam may also have to go because of his support for Mendelsohn.
The Times says that credit ratings agencies Standard & Poor's and Fitch are both concerned about the financial strength of R&SA at present, which could make it harder to get any rights issue away.
Another firm under pressure is fund manager Gartmore after yesterday's surprise announcement of the departure of Eran Peleg from his position heading corporate bond funds.
The Scotsman says the departure has robbed Gartmore of most of its credibility given the doubts expressed over Peleg's successor and rumours that the house foundations are increasingly shaky.
Comments gleaned from industry insiders by the paper yesterday included nuggets such as: "Gartmore won't go under overnight, but I can't help but get the impression that it's just gradually dwindling away."
A new Robert Maxwell disaster could strike UK pensioners if current drafts for new EU directives, such as the Prospectus Directive due out today, are not changed, according to comments from the Association of British Insurers reported in the FT.
The ABI says measures introduced after the Mirror pensions scandal, such as the need to appoint independent non-executive directors to boards, could be lost if the current drafts become law.
Worldcom is in the headlines again after accountants discovered another $2bn of losses masquerading as profits in the firm's accounts.
This means the losses covered up by illegal accounting practices at the firm are now $6bn and counting, according to The Times.
The Telegraph develops the theme of liability insurance today, saying that thousands of UK businesses are being threatened by huge hikes in premiums on insurance that they must pay by law.
The British Insurance Brokers' Association, representing more than 2,000 brokers is warning that firms will either have to operate illegally or cease trading because of premium hikes of up to 1,000%.
The real losers are likely to be workers who will only find out that their companies are without insurance after they are injured.
Insurers lost money every year between 1993-2001 on liability policies, BIBA says.
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