Up TO 3,500 of Equitable Life's 25,000 Irish policyholders have cancelled their policies with the company since it was forced to stop taking on new business in December. For those remaining, Equitable's managing director in Ireland, Mr Noel Creedon, said the Halifax deal removed uncertainty and meant long-term returns would return to where they were before a House of Lords' ruling left the mutual with a big hole in its capital, estimated at more than £1.5 billion sterling (€2.4 billion).

"The capital injection and the certainty this will bring will restore the underlying asset split in the with-profits fund to where it was before the ruling," he said yesterday.

The deal hinges on the support of policyholders to cap the guaranteed annuity liability to the company. Mr Creedon said this would enhance policy values and give a certain value to them in the future. Halifax is buying the operational assets of Equitable Life.