Clare Spottiswoode, negotiating on behalf of Norwich Union's policyholders for a slice of a £3bn surplus in its life fund, has issued a veiled threat to the UK's biggest insurer to enter a deal soon or face a regulatory regime that could make it harder for the insurer to take control of the funds.

Giving evidence to the Commons' Treasury select committee, examining rules for carving up surpluses, Ms Spottiswoode said: "Norwich Union has to weigh that if they don't do a deal soon, it is possible the rules change against them."