UK life insurer Friends Provident is likely to be contemplating a new wave of mis-selling claims against it following the decision of a small claims court, a UK national newspaper has reported.
<p>According to an article by the Mail on Sunday, a court ruling that upheld a customer assertion that Friends Provident failed to sufficiently warn him of potential problems with his endowment mortgage policy in a 'red' letter, has left the insurer open to a fresh round of compensation claims.<br /><br />The so-called 'red' letter is provided by the manager of an endowment policy to the policyholder as an update of the relative health of the policy. Under rules of the Limitation Act, the Mail on Sunday reports, a policyholder has three years to complain if they are unhappy with the state of their endowment mortgage. <br /><br />However, one customer who received a 'red' letter in 2000 has won a Small Claims Court action against Friends Provident, having successfully argued that the company failed to provide acceptable warnings of his endowment policy deficiencies in the letter of 2000. Despite being outside the three year term, the policyholder's complaint was upheld and he was awarded compensation of GBP1,500.<br /><br />As a result of this decision the Mail on Sunday has speculated that many other endowment policy holders with Friends Provident, who believed they were too late to make a complaint, will now file court papers against the insurer.</p>