Equitable's Irish investors could still get refunds

Thousands of Irish investors who lost money after the crisis at insurance company Equitable Life have been given hope of compensation by the European Commission.

The commission said that it would oblige the British government to treat all EU members of Equitable Life equally, irrespective of their state of origin. The UK parliamentary ombudsman is conducting its second investigation into regulatory failures by the British government regarding the Equitable affair.

In a response to a written question by Proinsias De Rossa MEP, the commission indicated on Tuesday that if the British government decided to pay compensation to members as a result of the parliamentary ombudsman's findings, it would force the government to compensate Irish policyholders who were left out of pocket in similar circumstances.

Equitable Life almost collapsed in 2000 after it was forced to honour guarantees made on older pension policies. The ruling led to cuts in the value of thousands of members' policies.

The UK's financial services ombudsman (Fos) has ordered compensation in some cases where policyholders were missold. Some "late joiner" policyholders claim they were badly advised by the company because they were not told of its potential £1.5 billion (€2.25 billion) liability to former policyholders.

Although the Irish funds were not ringfenced, Equitable Life members from outside the UK are not eligible for compensation through the Fos. It was also believed that non-UK residents would not have recourse through the parliamentary ombudsman.

Last year, the Irish Financial Services Regulatory Authority (Ifsra) told Irish policyholders they had no jurisdiction to award compensation because the Irish arm of Equitable Life was a branch of the UK operation.

The decision left some 6,500 Irish holders of the most badly affected policies with nowhere to turn except Europe and a UK-based Equitable Members Action Group (Emag) urged them to lobby their local MEPs.

The commission told Mr De Rossa it received "considerable" correspondence from Irish Equitable Life policyholders, which refer to an Emag petition alleging the British government was negligent in regulating the insurer.

A number of Irish Equitable policyholders also allege they were misled when they became members and feared they would be less well treated than UK policyholders.