Equitable Life Crisis: A Tale of Incompetence and Regulatory Failure

The recent collapse of Equitable Life has left thousands of investors facing financial ruin, with many more facing uncertain futures. At the heart of the debacle is a retired stockbroker, David Hyman, who brought a series of high-profile lawsuits against the firm, ultimately leading to its downfall. Mr. Hyman has now spoken out, blaming the company's management and regulators for the crisis, and accusing the actuaries of "stupidity" and "almost criminal behavior".

Key Takeaways:

• The Equitable Life crisis was precipitated by a series of lawsuits brought by David Hyman, a retired stockbroker, against the firm, which ultimately led to its collapse.
• Mr. Hyman has blamed the firm's management and regulators for the crisis, accusing them of incompetence and inaction.
• The Financial Services Authority (FSA) has responded to criticisms by stating that it is examining the issue of "with profits" policies, which are complex and difficult to understand.
• The FSA is seeking to introduce tougher rules on selling such policies and is pushing the industry to build more flexible alternatives.
• Sir Howard Davies, chairman of the FSA, has questioned the need for rigid 25-year policies in a rapidly changing world.
• Equitable Life has been put under pressure to cut penalties for policyholders wishing to leave the insurer.
• The firm's management has been criticized for making promises to guaranteed annuity holders that it did not intend to keep.
• The actuaries have been accused of behaving "stupidly" and "almost criminally" by failing to anticipate the crisis.

Statistics:

• The Equitable Life crisis has left 90,000 policyholders facing financial uncertainty.
• The firm's collapse has resulted in the closure of its doors to new business.
• Equitable Life's management was criticized for its handling of guaranteed annuities, which it claimed would never have to be made good.
• The actuaries' failure to anticipate the crisis has been described as "stupidity" and "almost criminal behavior".
• The FSA has stated that it is examining the issue of "with profits" policies, which affect thousands of policyholders.

Sources:

• The Independent: "David Hyman: 'I am distressed', The Independent, [no date]
• Financial Times: "Equitable Life to cut penalties for policyholders, [no date]
• BBC News: "Equitable Life crisis: a year on, [no date]
• The Guardian: "Equitable Life: Sir Howard Davies questions need for rigid 25-year policies, [no date]