A draft report criticising the ‘light touch' UK regulatory regime over the Equitable Life collapse is being undermined by a lack of support from Labour Committee members, claims a Conservative MEP.
The Committee of Inquiry into the collapse of Equitable Life met yesterday to finalise its conclusions and recommendations, but Sir Robert Atkins, Conservative MEP and member of the Committee, says all members supported the report “with the exception of the Socialist Group”.
Atkins claims British Labour MEPs are “seeking to wreck the proposed report” on the basis that it “criticises the British financial regulators and therefore, by implication, the Labour government”.
The report, authored by Diana Wallis Liberal Democrat MEP and Rapporteur of the Committee, still has to be put to the vote by the committee on 8 May and subsequently approved by the full Parliament, expected in June.
However, the Committee confirms at the meeting held yesterday “some Members announced their intention of tabling amendments to the report before the committee vote”.
But Atkins argues opposing the report “would be folly, since those who presented us with evidence of deceit, failure and incompetence - the pensioners - want the finger pointing somewhere”.
"This sensible constructive report does just that and Socialists will be letting down those who suffered financial and personal loss if the report is rejected."
In her draft report, Wallis argues the UK’s technique of implementing EU insurance legislation in a “piecemeal fashion” - through a number of different legal acts - “lacks clarity” and that "the implementation process as a whole was flawed”.
The 373-page document also severely criticises the UK regulatory system, including the Financial Services Authority (FSA), the Treasury and the Department of Trade and Industry, for its “excessive leniency” towards Equitable’s solvency margins.
Wallis claims Britain’s “light touch” regulatory policy "went one step too far and contributed to the creation of a weak regulatory environment, which allowed the difficulties at ELAS to grow unchecked".
In addition, the report says another factor was the regulators' “undue ‘awe’ or ‘deference’” towards the company, because of its previously solid reputation, and the system’s failure to challenge the “potential conflict of interests” when Equitable’s appointed actuary was simultaneously its chief executive.
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£300bn of liabilities
View from the front row
Transfer from occupational scheme
Appointed by FCA and PSR boards