Vanni Treves, chairman of the Equitable Life since March 2001
The European Parliament has called on the UK government to compensate victims hurt by the near-collapse of the Equitable Life insurance company.
MEPs voted overwhelmingly for a report by a committee of enquiry which examined the crisis at the society.
Equitable's problems came to a head in 2000, and became the biggest financial crisis to hit a UK pension company.
So far, the UK government has resisted calls for it to compensate people who have seen their payouts drop in value.
Equitable closed to new business in 2000, unable to put aside enough money to pay members with guaranteed annuity rate policies.
The European Union's report said that the UK government should take responsibility for the affair.
Labour MEPs voted against the report, calling it "flawed and politically biased".
"It does not reflect the facts and has unfairly raised expectations for policy holders," said Michael Cashman MEP, a member of the European Parliament's committee.
"It is for the UK Ombudsman to decide on the issue of redress and we would urge all stakeholders to take on board the practicable recommendations she will make in her report later this year," he added.
The report of the European MPs blamed the UK government for failing to ensure that EU legislation on insurance had been implemented properly.
It also claimed that the UK's system of financial regulation had been "excessively lenient" in failing to ensure that Equitable was solvent.
The report also said that there had not been any real prospect of the policyholders gaining any redress under the UK's legal and regulatory system.
"The UK government is under an obligation to assume responsibility," concluded the report.
The European Parliament's report called for the establishment of a compensation scheme, not only for policyholders in the UK, but for several thousand others in Ireland, Germany and elsewhere.
However, the MEPs acknowledged that they have no power to enforce their recommendations.
The near collapse of Equitable has affected many households, and the society had more than a million policyholders.
It nearly collapsed after failing to put aside enough money - amounting to £1.5bn - to ensure it could make good its promise of a minimum payout to 90,000 customers with guaranteed annuity rate policies.
When the UK courts told the society in 2000 that it had to make good its promise to those policyholders Equitable decided to close to new business.
In subsequent years it slashed the value of all its customers' with-profits policies and has sold off chunks of its business to raise money.
The European Parliament report pointed to two groups who suffered particularly badly.
Firstly there were those who bought pension policies just before Equitable's problems emerged, and those who were locked into annuity policies, unable to escape cuts in the value of their payouts of up to 40%.
"For the victims of the Equitable Life failure, the report delivers an analysis of the UK's flawed process of implementing EU law," said the Liberal Democrat MEP Diana Wallis, who helped draft the report.
She added that the report, "combined with the imminent report of the UK Parliamentary Ombudsman", should prompt the government "to deliver compensation to the victims".