David Matthews-Hillyard, Oxygen Mortgages

I recognise that we live in a society which looks to protect the consumer from being ripped off, but I do feel that the whole matter of endowment mis-selling complaints is consumerism gone mad. And I feel that time bars on endowment policy complaints are fully justified and I will try to explain why.

I would (conservatively) estimate that this whole issue has been in the public domain for the last 10 years, so why have policyholders not had the common sense to speak to their lenders and convert some, or all, of their loan to a repayment basis? Instead, they have stuck their heads in the sand hoping that the nanny state will suspend the normal limitation rules on making claims – as it did with the pension mis-selling scandal – and actually encourage them to make claims, and to seek monetary relief from the life companies to bail them out.

Of course there is an issue if endowments were mis-sold, but this does not appear to be the case, as all of the wordings and warnings, for instance, were in place at the appropriate time. Time bars are a sensible and expedient way of resolving this matter once and for all and I fully support their introduction.

Kim Barrett, KS Barrett and Associates

The answer to the question must be no. With endowment complaints there is no natural time bar other than three years from the date of the complainant first becoming aware of the mis-sale. This could be at any stage until maturity. If the matter cannot be resolved by the adviser complained against (which is the most likely scenario) it is then referred to the Finanncial Ombudsman Service (FOS). Regardless of the outcome it will charge a case fee to the adviser if they have already had a case dealt with by the FOS.

Virtually all endowment policies are likely to fall short of their originally targeted maturity values. So, unless the UK stock market experiences a dramatic recovery, the whole system is likely to bankrupt the financial services industry. Therefore, some capping of liability must be introduced.

We must also consider, however, that many product providers are using ‘surrender values’ when projecting forward target maturity letters, which are the main reason why massive amounts of complaints are being made. This situation is blatantly wrong and will inevitably be challenged at some point as it is providing a distortion of the actual situation.

Professional indemnity insurers would also welcome some restrictions on their future liabilities so as to be able to offer better terms on this insurance to financial advisers.

Ernie Hayes, Surrenda-link

A balance needs to be maintained in dealing with such cases and time bars on endowment policies do just that. The regulators give policyholders six months to complain from the receipt of their first ‘red letter’, and many life offices have extended this further. As well as ‘traffic light’ letters, there has been much discussion in the media on mis-selling, so policyholders should be aware of the issues involved. Six months from specific notification of a possible shortfall on their policy seems a reasonable time for them to react.

With such situations, it is important to ensure that frivolous complaints are not made. Investigating a possible case of mis-selling that may have occurred many years ago is time-consuming and costly. This is not helped by the fact that the more time that has elapsed, the less reliable people’s recollections will be. Further to this, it costs life offices a great amount to investigate mis-selling claims, so it is not in the other policyholders’ interests to encourage claims that are not genuine.

James Cotton, L&C

Under Financial Services Authority (FSA) rules, insurers have a right to impose time bars on endowment complaints, although they must give policyholders six months’ notice before their time runs out.

From an insurer’s point of view, imposing time bars provides a timeframe for dealing with potential liabilities and settling claims. The move has been seen by some as a way of avoiding future claims, but there could be a more positive aspect to these restrictions.

Policyholders have been receiving information for a number of years now about any potential endowment shortfall and if there is a case for complaint, then action should be taken sooner rather than later.

Time bars could raise awareness of the shortfall problem and hopefully inject some much needed urgency into policyholders – the danger is that they simply do not read or fully understand the information they receive.

The notice needs to be given big and bold – perhaps even sent by recorded delivery in order to get the full attention it deserves and not hidden away.

Tim Henson, All Types of Mortgages

It is unreasonable that the current assumption is that every endowment policy was sold illegally and/or inappropriately.

It would be interesting to establish how many claims have actually been proven and how many have been dismissed. However, where there is proof of mis-selling there should be no time bar.

Consumers should be aware though that markets can fall as well as rise, and that they have also had life cover at the initial premium throughout the life of the policy – to date and to maturity.

Caveat emptor should apply in part in that the customer should also have a duty of care to themselves in ensuring that they fully understood the terms and conditions of the policy they were purchasing. The current idiom would lead us to believe that all customers were incapable of making such decisions.

With litigation culture we are encouraged to complain about everything, no matter how small or spurious. So let us get this in perspective.