Four former senior executives at Equitable Life are to face disciplinary proceedings over the mutual insurer’s near-collapse four years ago.
The four are former managing directors Roy Ranson and Alan Nash, ex-chief executive Chris Headdon, and actuary Barry Sherlock.
The Institute of Actuaries has referred allegations of misconduct against the four to a tribunal. The tribunal panel has the power to impose unlimited fines. It could also suspend all four from the actuarial profession.
The allegations relate to how the Equitable Life was run between 1988 and 2000. The former Equitable executives are accused of a range of errors and misjudgements, which together amount to a failure to meet the standards of professional competence expected of actuaries.
According to the Institute, an investigating committee has spent the last two years compiling evidence. Equitable Life nearly went bust in 2000 because it could not meet its liabilities. As a result, Equitable savers have seen the value of their policies slashed by up to 40% since then. Groups representing Equitable Life policyholders welcomed the actions against the auditors and former senior executives.
The accountancy group Ernst & Young, Equitable Life’s former auditor, could be subject to an accountancy industry investigation over its role in the crisis. The current board of the Equitable is currently suing both Ernst & Young and 15 former auditors for more than £5bn in the High Court.
Ernst & Young have until the end of this week to respond to allegations of failure put to it by the accountants’ disciplinary board, the Joint Disciplinary Scheme. The Joint Disciplinary Scheme will then decide if the allegations should be referred to a tribunal.
If a tribunal finds against Ernst & Young, it could face penalties ranging from a reprimand to an unlimited fine. The tribunal could also recommend that Ernst & Young’s registration as an auditor be removed.