Equitable in 'serious' sale talks

The group, reporting its annual results for 2005, said it was now more stable and secure than when it last reported.

Excess realistic assets, the key measure of its solvency, have risen to £669m ($1.17bn), up from £455m in 2004.

Equitable nearly collapsed in 2000 when the insurer said it could not afford to keep some of its pension promises.

The insurer now says it could operate securely as a closed with-profits fund, paying policyholders their benefits as they were due.

'Willing sellers'

The group said its with-profits fund yielded 10.1% during the year, and as a result it was paying bonuses of 4.5% on with-profits pensions policies, up from 3.5% last year, and 3.6% on life policies, up from 2.8% in the previous year.

"I believe we're nearly out of the woods"
Charles Thomson, Equitable Life chief executive

"We are willing sellers if a deal can be done but we are not forced sellers and we are strong enough to run off the with-profits fund," said chief executive Charles Thomson.

"The society is once again more stable and more secure than the last time we reported. I believe we're nearly out of the woods."

But as a mutual, he added, any move to sell the company would have to be in the interests of policyholders, and any change would need to be approved by them.

European probe

In January, it was announced that the Equitable Life scandal was to be examined by the European Parliament.

The investigation will focus on whether the government failed in its regulatory duty and may call on UK Treasury officials to testify.

More than 200 MEPs signed the petition calling for the investigation into the scandal, which hit a million savers.

Many Equitable Life policyholders lost a substantial portion of their life savings when the insurer had to cut payouts to stay afloat.

The European Parliament's investigation is the latest in a long line of inquiries into the Equitable scandal.

RELATED INTERNET LINKS:
Equitable Life
The BBC is not responsible for the content of external internet sites