THE chairman of troubled mutual Equitable Life said yesterday the Parliamentary Ombudsman was "duty-bound" to reopen her investigation into the society's regulators.

Vanni Treves said the report into what went wrong at the society, carried out by Scottish judge Lord Penrose, had identified a "litany of failure by the regulatory regime and former management".

He said ombudsman Ann Abraham had a great responsibility to reopen her investigation into maladministration by the society's former regulators, the Department of Trade and Industry and the Treasury, as well as the Government Actuary's Department.

Speaking at the society's annual meeting, he said Lord Penrose described the society's regulation as inappropriate, said Government departments had failed, and that the Treasury had been wholly passive.

He said: "We believe the Parliamentary Ombudsman is now duty-bound to investigate the issue of regulatory maladministration and, if appropriate, to recommend compensation."

He said that she was canvassing MPs about whether to reopen the investigation.

Ms Abraham has already looked at the regulation of Equitable between 1999 and 2001, but found there was no evidence of maladministration by the Financial Services Authority.

But Mr Treves said she also needed to investigate the society's belief that the regulators knew that, during the late 1980s and 1990s, its capital was diminishing to a dangerously low level, and that they failed to challenge the lawfulness of the terminal bonus policy when it was introduced.

Equitable got into difficulties after losing a House of Lords ruling over the rights of some policyholders, leaving it with a £1.5bn liability, and forcing it to close to new business.