LONDON: The Serious Fraud Office is not investigating mutual insurer Equitable Life Assurance Society, which was on the verge of collapse five years ago. The SFO office said it considered all the available evidence and could not find anything that would justify a full investigation.
Earlier, the SFO had disclosed that it is seriously considering a probe into whether the insurer had properly explained the change in its bonus policy caused by its financial difficulties to existing and potential policyholders. It had withheld a decision in the light of legal action proposed by the insurer in the civil courts against some of its former directors and the then auditors, Ernst & Young, claiming compensation of 3.7 billion pounds.
However, early this month, Equitable Life had to abandon its negligence claims against nine of the 15 former directors, having already dropped a 2 billion-pound negligence case against Ernst & Young in September. The civil case made the insurer poorer by 45 million pounds, which were to be paid towards legal bills.
The 243-year-old insurance company had stopped taking new business in December 2000 when the House of Lords directed it to honour the promises it had made to pay guaranteed bonuses to some of its policy holders.
The SFO said it had studied the Penrose Report, which analysed events at the insurance company, and other material held by it, but could not get anything substantial to conduct a full-fledged enquiry.
Posted
on : Tue, 20 Dec 2005 20:05 GMT | Insurance News
By : Salim Patel
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