Lord Penrose Inquiry

(last updated 31 May 2007)

Following the House of Lords decision and the impact it had on the Society and the subsequent closure to new business, there was strong public concern about what gave rise to Equitable Life's issues. In light of this concern the Government decided to launch an Inquiry.  Ruth Kelly MP, HM Treasury, wrote to Lord Penrose on 31 August 2001 to ask him to lead the Inquiry and Lord Penrose agreed.  Lord Penrose is independent of the Government and of Equitable Life.  The letter set out the terms of reference for the inquiry as follows:

'To enquire into the circumstances leading to the current situation of the Equitable Life Assurance Society, taking account of relevant life market background; to identify any lessons to be learnt for the conduct, administration and regulation of life assurance business; and to give a report thereon to Treasury Ministers.'

Publication of the Lord Penrose report
The inquiry has concluded its investigations and produced a report, which Lord Penrose delivered to HM Treasury on 23 December 2003. The Treasury published the report on 8 March 2004.

On 5 July 2004, the FSA website was updated as follows:

Equitable Life

In his letter of 8 March to the Financial Secretary, Callum McCarthy said that the FSA would ask Equitable Life to consider whether the report by Lord Penrose might provide a basis for further claims against the society. The letter said that we would undertake our own detailed work to consider the issues and to reach our own conclusions about potential claims. That work has since been completed. The FSA also received further information from Equitable Life about its own assessment.

Equitable Life's assessment remains as set out in our letter of 8 March - that the report does not provide the basis for additional claims that would threaten its solvency. Having undertaken our own analysis, the FSA has also concluded that generic claims against Equitable Life regarding its basis for allocating bonuses during the 1990s are unlikely to succeed.

News Regarding Lord Penrose Report

• Factsheet issued by the Society to those policyholders who made a complaint following the publication of the Lord Penrose report, 27 October 2004
• Equitable calls on Government to give GAD powers to Ombudsman and EMAG will not be asked for costs after AGM defeat
• Letter sent to Douglas Alexander MP, The Cabinet Office regarding Parliamentary Ombudsman remit
• Equitable Life press release: Equitable Life Board receives “unequivocal” legal advice - “No realistic claims against regulators”, 19 April 2004
• Letter from Herbert Smith, 19 April 2004
• Notice of Annual General Meeting 2004 Additional Information, 19 April 2004
• Corrected evidence of Ruth Kelly, MP and Lord Penrose, provided to Treasury Select Committe on 24 March 2004
• Equitable Life press release: Further comments on Lord Penrose Report, 11 March 2004
• Equitable Life press release: Initial Reaction, 8 March 2004
• HMT press release: Ministerial statement on publication of Lord Penrose Report, 8 March 2004
• HMT press release: Launch of independent reviews, 8 March 2004
• Serious Fraud Office press release: Equitable Life, 8 March 2004
• FSA press release: Equitable Life inquiry, 8 March 2004
• Written Ministerial Statement on Developments in Financial Services,
  12 February 2004
• Written Question and Answer from Ruth Kelly, MP on Equitable Life, 26 January 2004
• Written Ministerial Statement issued by HM Treasury on Equitable
  Life, 5 January 2004
• Lord Penrose delivers report into Equitable Life to Treasury
  Ministers, 23 December 2003

For further information visit:

Equitable Life Inquiry website: www.equitablelife-inquiry.org