The bill, which is to be enacted within 18 months, will set out guidelines for home reversion to be regulated by the FSA.
It was previously thought any regulation would not appear until mid-2007 at the earliest.
Lifetime Mortgages will remain as they are, regulated by the FSA under current mortgage regulation rules.
GE Life product manager Simon Little says: “We are delighted by the news which shows the industry and government working together. It needed to happen and the move will put home reversion on the same footing as lifetime mortgages.”
Norwich Union press spokesman Dave Gwyer says: “We have always supported this move and have been in discussions with the treasury lobbying for the regulation of the home reversion market.”