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The committee concludes that EU life insurance legislation was transposed into British law in an unsatisfactory fashion. In addition, the UK's financial services regulators are severely criticised, notably for their “excessive leniency” towards Equitable Life’s solvency margin.
Policyholders also had difficulties to identify which regulatory bodies were responsible - “home state” or the “host state”. “That must reveal either a fault in our primary legislation or a fault in the way it has been implemented in the UK or other Member States”, Mrs Wallis said.
The UK Government is under an obligation to assume responsibility, the report finds, and should therefore devise an appropriate scheme 'with a view to compensating Equitable Life policyholders within the UK, Ireland, Germany and elsewhere'.
The report calls for stricter rules on insurance supervision and regulation throughout the EU, for Member States and the Commission to improve the transposition and monitoring of EU legislation and for national regulatory authorities to cooperate better.
The report concludes that the Commission, did not monitor the application of the EU insurance legislation effectively, and should in future be “more proactive” on this front 'to ensure that the legislation is producing the required effects'.
Commissioner McCreevy accepted the report's findings that the Commission could have done more to ensure that EU insurance rules were properly implemented and applied in the UK. He reminded MEPs, however, that it was not the Commission's role to be 'regulator of the regulators'.
Equitable Life
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All texts adopted on 19 June