Equitable Life policyholder action groups have again demanded the resignation of chairman Vanni Treves.
Equitable action groups want Mr Treves to stand down
The call came after the company on Thursday abandoned its High Court case against former auditors Ernst & Young, at a cost of £30m ($54m) in legal fees.
"His [Mr Treves'] credibility is shot now and he should go," said one action group spokesman, Paul Weir.
The Equitable had claimed E&Y failed to warn it had financial problems, but dropped its case after legal advice.
Lawyers for the Equitable had warned the insurer that there was a strong chance it could lose the case.
Equitable came close to collapse in 2000 and had to close to new business.
Its case against Ernst & Young was that the auditors had failed to inform the then board of directors of the financial mess it was in.
The mutual had hoped to recoup some of its losses by taking the legal action.
"I would probably have fallen on my sword over this," said Liz Wants of the Equitable Life Members Group.
"It was a badly thought out case."
The Equitable had originally sued the former auditors for £2bn but dropped part of its claim - worth £1.3bn - in July.
On Thursday it dropped the case entirely.
Speaking to the BBC, Mr Treves was unrepentant: "If we had said to policyholders three years ago, should we invest £50 each in order to pursue a case we are told is cogent and cost effective, they would have overwhelmingly said yes."
Equitable's lawyers warned it may lose the case
Ernst & Young chairman Nick Land described Equitable's decision to abandon the case as a "complete vindication", adding that the legal action was "ill conceived" and should never have been launched.
"The past four years since the legal proceedings began have been a scandalous waste of time, money and resources for all concerned," he added.
Ernst & Young's barrister, Mark Hapgood QC, told the High Court that the Equitable decision to abandon the case was "the biggest climb-down in English legal history".
Vanni Treves argued that the board had a duty to its policyholders to pursue the original claim against Ernst & Young.
He explained that the decision to drop the case was taken after the group's lawyers said there was a strong chance the court could rule that the former directors of the company would not have acted differently, no matter what advice was provided by Ernst & Young.
However, the Equitable confirmed to BBC News that it would continue with its case against 15 of its former directors.
The mutual still claims the directors were guilty of mismanagement and are suing them for £1.7bn.
The abandonment of the case against Ernst & Young will be a further blow to policyholders of the troubled mutual.
Equitable nearly collapsed five years ago, when it emerged that it could not honour some pension policies. The mutual society miscalculated how much it would have to pay out for its Guaranteed Annuity Rate (GAR) policies.
The society tried to renege on promised payouts, but a ruling by the House of Lords in 2000 forced it to honour its obligations.
Many Equitable savers have seen their life savings cut as a consequence of the society's troubles.