The FSA is changing its rules to require firms explicitly to warn endowment policyholders who have a high risk of shortfall of the date that their right to make a complaint about the sale of the policy expires.
Endowment policyholders have three years to complain once they have received their first 'red letter' notifying them that their policy is running a high risk that it will not pay out the target amount at the end of the term.
The revised rules will require firms to make clear to policyholders that they have three years from their first 'red letter' to complain, as well as issuing the time bar warning at least six months in advance of the date from when the customer would be time barred from making a complaint.
The new rules come into effect on June 1st.
FSA director, retail themes Anna Bradley says: “We are applying these measures straightaway to ensure that consumers who believe they were missold their endowment policies are clear about the date their right to complain runs out and to address concerns that some consumers could unwittingly lose the opportunity to claim compensation.”