Prudential avoids time bar for endowment complaints

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The Independent Online

Prudential, the UK's second largest insurer, yesterday became the latest group to promise not to impose time limits on those making complaints about mortgage endowment mis-selling, despite new rules introduced this summer which allow companies automatically to reject complaints more than three years old.

Prudential, the UK's second largest insurer, yesterday became the latest group to promise not to impose time limits on those making complaints about mortgage endowment mis-selling, despite new rules introduced this summer which allow companies automatically to reject complaints more than three years old.

The move comes just two days after Aviva, the UK's largest insurer, announced that it had decided to push ahead with the time-bar policy next year. Aviva said it had begun writing to every mortgage endowment policyholder, and would ensure that each one had been given at least 12 months' notice of the new policy - more than double the Financial Services Authority's minimum of six months.

Standard Life and Legal & General, the two largest mortgage endowment providers, have said they will not be imposing time bars. But Standard would not commit to the policy for the long term, reserving the right to change its mind in the near future.

Prudential and L&G's move to impose no time limit will leave them exposed to receiving complaints for the next 20 years. Furthermore, it will allow customers who believe they have been mis-sold to hedge their bets - holding on to their policies for the time being, but reserving the right to complain at a later stage if their endowment does not perform well.

James Murray, a spokesman for Prudential, said the decision had been made in the interests of customer service. He said: "Some people will want to wait and see what happens. If they want to speak to us this year, next year, or in five years that's fine. We think it's important that each company makes their position explicit." Peter Timberlake, of L&G, said: "From a customer perspective, we believe it's appropriate we allow customers their right to complain. Simply using a time bar set by the FSA seems unnecessarily unfair on the customer."

But Aviva said imposing a time bar was only fair for its existing with-profits policyholders, giving it the chance to draw a line under the mortgage endowment issue by the end of next year, rather than leaving them exposed to an "open-ended complaints system". Mike Urmston, Aviva's chief actuary, said: "We will of course look sympathetically at individual circumstances on complaints which just fall foul of the time-bar period where this has happened through no fault of the customer."

When the FSA's new time-barring rules were introduced two months ago, MPs and consumer groups were up in arms after it emerged that a possible 700,000 policyholders may find themselves time barred before ever knowing about the rule. Life insurers have agreed to honour complaints from anyone that falls into this group.

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