-----Original Message----- From: fsarulesok [mailto:fsarulesokaol.com] Sent: 09 September 2005 11:13 To: IFA Defence Union Subject: [IFADU List] Defect in Design .....item 2

Evan :

We agreed to move my potential involvement with you a stage further, by releasing a second item to your members - as discussed therefore - here it is

http://www.probonopublico.co.uk/downloads/PromisesPromisesBIBAarticleSept1985.pdf

I want to restrict my own comments at this stage - I would rather invite your members to read the item and hopefully offer their own comments.

The article was written in 1985, (and was supported by the written corroboration of the 9 CEO's I approached to respond to the comments).

These - in my opinion - are the essential elements of the article :

1 : That terminal bonuses would prove to be a terminal disease

2 : That the public would lose virtually all trust in the financial services industry

3 : That actuaries would have to be wholly independent from Insurers

4 : That "stochastic methods" of forecasting were required

5 : That the DTI requirements for valuing "assets" and for valuing "liabilities" were deeply flawed.

6 : Only those with a "fiduciary" duty to the client could fully/adequately ensure the performance of the disparate elements involved.

Now my only 2 questions at this stage :

Q : Which is/was more important - "who" wrote the article or "what" it forecast?

My answer : It is crucial that "who" I am or was is seen as all but irrelevant - it is the "what" that is crucial. That is what led to my earlier request for anonymity pro tem.

Q : Are the problems your members currently face a rare occurrence - or an example of a much more deep seated problem?

My answer : The different elements listed above all form part of the genesis of the problems that your members face

- but

- they also - as only one example - form part of the problems faced by the policyholders at Equitable Life,

- and the examples go way beyond those two areas.

The "common link" lies in these words "defect in design"

- and it is in that area that I believe I can provide help.

So as agreed - let's see what your members say?

Mike Fenwick ...