Equitable Life, the troubled British life assurer that nearly collapsed two years ago, apologised yesterday for its recent "ghastly" performance and stressed it was solvent as it faced up to angry policyholders.

"This has been a very, very bad year. It's been a ghastly year," chairman Mr Vanni Treves told policyholders at the annual general meeting of the 240-year-old society.

Britain's oldest life assurer, which has up to 25,000 policy-holders in the Republic, ran into trouble two years ago after losing a legal battle over pension policies with guaranteed returns, which were sold in the 1970s and 1980s when interest rates and investment returns were high.

In one of Britain's biggest financial scandals of recent years, it had to close to new business and slash bonus payments.

It could no longer afford to honour its guarantees as stock markets fell along with interest rates.

Equitable was left with a cash shortfall estimated at £1.5 billion sterling (€2.4 billion) but it reached a compromise deal with policyholders to put a cap on its liabilities.

More than 1,000 policyholders crammed into a London conference hall yesterday to grill Equitable's board on the society's solvency, poor customer service and bonus payments for its directors.

Equitable has around one million policyholders.

Policyholders raised concerns over the society's solvency.

Last year, Equitable's assets fell 30 per cent to £24 billion, which it partly blamed on poor investment returns resulting from a slump in financial markets.

The society's chief financial officer, Mr Charles Bellringer, tried to allay policyholders' worries.

"Let there be no ambiguity about this.

"Your society has always been solvent, is solvent and we fully intend to keep it that way," Mr Bellringer told the meeting.

As part of its rescue plan, Equitable is offering members a one-off boost to their pensions in return for giving up a guaranteed investment return - something that Mr Treves admitted would have caused some grief to Equitable's policyholders.

Others are being asked to waive rights to sue Equitable for mis-selling pensions and life assurance.

Policyholders also questioned the payment of a bonus to Equitable's chief executive, Mr Charles Thomson, who got a £30,000 bonus last year. Mr Treves received a basic salary of £58,750.

Mr Philip Otton, head of Equitable's remuneration committee, defended those salaries.

He said he was certain that those directors would have left Equitable if they had not been paid appropriately.  (Reuters)