Equitable Life has admitted that it should have informed certain guaranteed annuity rate (GAR) policyholders that it had reimposed market value adjusters or exit penalties if they surrendered their policies early.
Previously, the society had waived the penalties for GAR policyholders with retirement annuity policies who were aged more than 50, although their contractual retirement date was 60.
The mutual said it pursued this policy because these guaranteed rates had become expensive to honour and it was better for the society if the policyholders transferred to another provider.
But following the British High Court's sanctioning of Equitable's compromise deal, in which GAR policyholders agreed to give up their rights to guaranteed rates in exchange for an uplift in their policies, Equitable has reimposed the exit penalty.
Some 25,000 Irish Equitable Life policyholders will receive an "uplift" in the value of their funds next month for giving up some of their rights. GAR policyholders will get a 17.5 per cent rise for giving up their guarantees. Holders of with-profits investments will receive an average rise of 2.5 per cent for giving up their rights to pursue legal claims over mis-selling.
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