Perils of the bandwagon

I have received some correspondence since suggesting that compensation should not be paid to Equitable Life victims, who include me.

While accepting that regulators failed to do their job and investors were misled, I believe that on this basis millions of other could make an equally good case for compensation. Start this bandwagon rolling and there is no end in sight.

Let us start with pensions mis-selling. Some £12bn was paid to the victims but the money coming largely from with-profits funds of insurance companies.

So the savings of one set of investors were raided to pay compensation other savers and mis-selling fines while the regulator sat idly by. Can those investors who remained now please have compensation because their returns have undoubtedly been affected?

A similar process of robbing Peter to pay Paul happened in the endowment mis-selling scandal. In fact it was only in the past few months that insurers have been told they cannot raid with-profits fund to pay mis-selling compensation.

In addition the FSA refused to force an industry-wide review of endowment mis-selling, so some who were mis-sold will never have claimed their restitution. Meanwhile the then head of the FSA was joking about endowment losses at an industry lunch - surely there was a failure of regulation here, not to mention a failure of taste?

Then there are those who invested in zeros and other classes of split capital investment trust share. Zeros investors in particular were led to believe that they were in a low risk investment. In fact as late as 26 April, 2002, - some nine months after problems were uncovered - the FSA website described zeros as 'lower risk than other shares in splits', 'relatively secure' and 'relatively low(er) risk than shares'.

Many investors lost large chunks of their savings as the regulator dozed on the job. The industry put together a puny compensation package but I did not notice the taxpayer coughing up.

Finally we could look at with profits bonds. Pensioners were enticed into these with promises of high regular income. Yet the insurance company actuaries knew that these returns could not be sustained. Returns on other with profits investments were already falling yet people were being duped into parting with their savings by insurers seeking to boost cash-flow.

Yet the FSA did nothing to prevent it and has done little to help them since. These investors too have lost money while the regulator stood idly by and some are still getting no returns on savings that are trapped.

So where is the investigation into the conduct of the insurance industry. Who knew what and when. And crucially, if Equitable's policyholders are due compensation, surely these groups should be too.