MPs are expected to launch a scathing attack on insurers in a report on the endowment crisis published tomorrow.

The Treasury Select Committee is likely to criticise the industry for consistently putting its own interests first and failing to have a proper duty of care for policyholders.

The chief executives of insurers are expected to be slated for accepting pay rises of up to 71 per cent at a time when the majority of policyholders were facing shortfalls in the projected maturity values of their investment.

Companies are also expected to be criticised for failing to do enough to encourage people to complain if they thought they were mis-sold their policy.

If current conditions continue, City watchdog the Financial Services Authority estimates people who took out endowment policies to pay off a mortgage will collectively face a shortfall of about £3 billion when their policies mature.

It said about 78 per cent of the 6.8 million people who were relying on their policy to pay off their mortgage faced an average shortfall of £5,500 each.

The chief executives of Aviva, Legal and General, Royal and Sun Alliance and Standard Life were grilled by the committee in January.

Committee chairman John McFall wanted to know how the heads justified pay rises of between 45 per cent and 71 per cent at a time when the industry was going downhill "like a slalom skier".

Wednesday March 10, 2004