Equitable Life ran my Additional Voluntary Contributions (AVC) top up pension saving fund at Tower Hamlets Council. In 2000 the Equitable Life effectively became bankrupt due to an adverse House of Lords court judgement.
The 200 year old mutually owned Equitable Life had promised to pay savers a rate of return which due to changing market conditions was completely unaffordable.
The basis of the claim against the Government financial regulators (and others) at the time was that they had failed to regulate it properly and if they had then it wouldn't have failed.
I had only recently started saving with Equitable life and had 50% invested in a unit trust fund which was not directly affected. However, Equitable life was seen at the time as a leading pension and investment company and many people lost a massive chunk of their life savings.
The reasons for the collapse are complex and still under dispute but rubbish governance as well as poor regulation was at the heart of it. Equitable Life was the oldest mutual insurer but behaved almost as badly and as recklessly with policy holders money as any of the big privately owned banks did before 2007.
This is a lesson to all of us who believe in mutual ownership. 30,000 policy holders died before they could receive any compensation and probably less than 10% of losses are going to be compensated.
Check out Equitable Life Members Support Group