Equitable Life policyholders who joined shortly before its near-collapse could get compensation after a ruling by the Financial Ombudsman Service.
Equitable Life is the world's oldest mutual life insurer
The 1,500 "late-joiners" joined after September 1998, by which time the firm was aware of its problems.
The firm should have warned them and, as it didn't, their policies were mis-sold and they are entitled to compensation, the ombudsman said.
The ruling was made on a test case brought by a female investor.
Equitable nearly collapsed four years ago, when it emerged that it could not honour its life insurance policies.
The company was left with a £1.5bn liability after losing a House of Lords case over its "guaranteed annuity rates" (GAR) policies.
Equitable has set aside £75m to cover compensation in all late-joiner cases, including those not covered by Wednesday's ruling.
A spokesman told BBC News that it was "disappointed" and that it was now consulting advisers on whether it should challenge the ruling.