Equitable chiefs face fresh probe

Mr Headdon: is one of the four men facing disciplinary proceedings

Four former senior executives at Equitable Life are to face disciplinary proceedings over the mutual insurer's near-collapse four years ago.

The four are former managing directors Roy Ranson and Alan Nash, ex-chief executive Chris Headdon, and actuary Barry Sherlock.

The Institute of Actuaries has referred allegations of misconduct against the four to a tribunal.

The tribunal panel has the power to impose unlimited fines.

It could also suspend all four from the actuarial profession.

Slashed

The allegations relate to how the Equitable Life was run between 1988 and 2000.

The former Equitable executives are accused of a range of errors and misjudgements, which together amount to a failure to meet the standards of professional competence expected of actuaries.

According to the Institute, an investigating committee has spent the last two years compiling evidence.

Equitable Life nearly went bust in 2000 because it could not meet its liabilities.

As a result, Equitable savers have seen the value of their policies slashed by up to 40% since then.

Reprimand

The Institute's action follows hot on the heels of reports that accountancy group Ernst & Young, Equitable Life's former auditor, could be subject to an accountancy industry investigation over its role in the crisis.

The group has until the end of this week to respond to allegations of failure put to it by the accountants' disciplinary board, the Joint Disciplinary Scheme (JDS).

Equitable life came to the brink of collapse in 2000

The JDS will then decide if the allegations should be referred to a tribunal.

If a tribunal finds against Ernst & Young, it could face penalties ranging from a reprimand to an unlimited fine.

The tribunal could also recommend that Ernst & Young's registration as an auditor be removed.

The firm has described the allegations as "misguided," and has said it will defend itself "vigorously."

Daylight

Groups representing Equitable Life policyholders welcomed the actions against the auditors and former senior executives.

"At last we are starting to see some daylight," Liz Kwantas, of the Equitable Life Members Help Group, told BBC News Online.

"These two separate actions show that the view of Equitable policyholders that the crisis occurred due to maladministration and mismanagement rather than bad luck or an underperforming stock market is finally being accepted."

The current board of the Equitable is currently suing both Ernst & Young and 15 former auditors for more than £5bn in the High Court.