Standard Life adviserzone – Time-bar rules on mortgage endowment complaints

On 1 June 2004 the FSA introduced new rules regarding time-bars on endowment complaints. The new rules require firms, who intend to impose time-bars, to explicitly warn endowment policyholders of the date that their right to make a complaint expires. The customer must receive this warning at least six months before the expiry date. Firms not intending to apply the time-bar do not need to advise policyholders of the final date.

The new rules do not apply to cases already excluded due to existing time-bar rules.

Further details can be found on the FSA website in the FSA Handbook Notice 33.

Communications to customers

Where the insurer decides to impose time bars for policies where they were the selling adviser, and the selling intermediary chooses to apply time bars on their sales, the warning communication is likely to be contained within the insurer's re-projection letters.
Current ABI guidelines indicate that if an insurer chooses not to time-bar and decides not to include time-bar warnings in their re-projection letters on behalf of intermediaries, they must either:
- obtain written agreement from the intermediary who sold the policy that they do not wish to implement time-bars, or
- make reasonable efforts to provide any intermediary who does wish to impose a time-bar with the information they need to contact their customers direct.

Standard Life's position

Standard Life is to apply time-bars for mis-selling complaints on mortgage endowment policies for which it was responsible for the original advice, i.e. sales through tied representatives (mainly Halifax and Bank of Scotland) and our own Direct Sales Force. We wrote to our customers from February 2005 onwards and informed them of a specific date by which a complaint must be lodged if they feel they may have a legitimate reason to do so. For the majority of customers, this was May 2006. Reminders were issued from June 2006.

Standard Life is keen to support advisers in this matter and we have discussed possible approaches for adviser sold cases with AIFA as well as directly with advisers. Our research has shown that the vast majority of advisers intend to time-bar and that the preferred communication medium is the reprojection letter issued by the provider. Based on this feedback, we have decided to introduce the time-bar facility as standard in our reprojection letters.

We are aware that some advisers do not intend to time-bar and therefore do not want Standard Life to include this information in reprojection letters. To cater for this we have also offered advisers the option to opt-out if they confirm this to us in writing.

The information on this site is for qualified advisers only and must not be relied on by anyone else. If you are not an adviser you should go to our main website for information about our products and services.

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