Almost half a million policyholders were left wondering what would happen to their investments after the world's oldest mutual life insurance company was turned down by its only remaining prospective buyer. Equitable Life of London and Aylesbury, England, is in deep financial difficulty due to a July order from Parliament that it must pay in full some $2.16 billion in bonuses on guaranteed annuity rate policies written decades ago when interest rates were high. The company had tried to reduce the payments because interest rates have since dropped. Late last week Equitable announced it would stop writing new business, and its managing director resigned. Prudential Life, Britain's largest insurer and the last of an original field of 15 potential bidders, withdrew, saying it "could not make the numbers add up." Equitable's health insurance division is to be put up for sale, and analysts said its trust business could end up on the market as well.
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