Financial secretary to the Treasury, Ruth Kelly MP, says the report into the near-collapse of Equitable Life places blame for its weakened financial position largely on the former appointed actuary and the society's managment regime.
According to a statement still being read by Kelly in the House of Commons, the problems were caused by "deep-seated" errors and its unique management system of inadequate controls "which lay at the heart of the society".
However, MPs are still questioning the failure of the regulatory system - both former regulations maintained under the Conservative Party and of those to be maintained by the DTI - the body which was previously responsible for regualtion of Equitable Life.
In particular, it is thought the "unique" charactistics of the management structure - and the virtual dependence on the word of former appointed actuary in 1982, Ron Hanson, who was later chief executive and appointed actuary of Equitable Life in the 1990s - led to the society's eventual weakening of its assets and liabilities, said Ruth Kelly.
Furthermore, Kelly says Lord Penrose "firmly pins the blame on the society", as key information was even withheld through "manipulation and concealment" from the board, let alone policyholders and the regulators and that as a result, the society "was the author of its misfortunes" because there was serious omission of communication to policyholders and of relevant information of perspective interests.
Hanson, according to the Penrose report, did not inform the board of the risks policyholders faced under existing policies and practices of the board, and at best the board's knowledge was "limited" and even its own board did not fully understand the issues of its own financial until 1998.
That said, Penrose also suggests the earlier light-touch regulation of the eighties and nineties has been criticised for, with hindsight, not sufficiently preventing the laws rather than the individual role of the regulator.
Chapter 19 of the Penrose report says; "There was a general failure of the government regulators and the government actuary's department," and the FSA and government actuary's department "did not have sufficient knowledge of the society's position".
Kelly says the government sympathises with all policyholders who were deceived by this company, but argues the government cannot be responsible for all liabilities.
Penrose instead suggests carrying financial consequences of the Equitable Life are "properly matters for the courts of justice" while Kelly suggests the policyholders should now pursue mis-selling claims from their own society - even though this would in effect mean raiding their own funds in order to pay compensation.
He is quoted as saying the judgement of the House of Lords in the Higham case in 2001 was not responsible for the crisis that ensued, as claims of £1.5bn should not have brought down a society with assets of £32bn.
It is now for the Serious Fraud Office and the DTI to assess whether further action should be taken against individuals of the former Equitable Life board.
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