Norwich Union, the UK’s largest life insurer, has confirmed that it intends to introduce time barring on mortgage endowment complaints, under FSA rules, by the end of 2005.

The company has started writing to its 1.1 million endowment policy holders, as part of an ongoing review mailing, stating that it intends to introduce time bars on mortgage endowment complaints in the future. Customers will be given at least 12 months individual notice before a time bar becomes applicable – double the six months notice required by the FSA.

Norwich Union believes that applying a time bar is fairer to all its with-profits policyholders than having an open ended complaints system where people could in effect complain about a policy sold ten years ago, up to fifteen years into the future. The complaints’ process exists to compensate for the genuine mis-sale of a policy and not to compensate for adverse investment performance during a policy’s lifetime.

Norwich Union chief actuary, Mike Urmston, said: "We believe that a time bar is the fairest approach to take in relation to mortgage endowment complaints. An open ended complaints system where people could complain up to 15 years into the future about a policy sold 10 years ago is simply unfair to other with-profits policy holders and could lead to compensation for the wrong reasons."

The company expects the first letters to affected policyholders confirming specific time bar dates, applicable in 2005, to be issued during October/November 2004.