ONE of the biggest mutually owned insurance companies, Norwich Union, is close to opting for a stock market flotation, British insurance industry sources have confirmed. Thousands of Irish policyholders would be among those to benefit if the float goes ahead. An announcement on the group's future is expected in the late autumn and the flotation, worth up to £3.5 billion sterling would then probably happen in the first half of 1997, the sources said.

The Guardian has reported that a preliminary decision had already been taken to bring the insurer to market in a flotation but a spokesman for the company said its official position had not changed since last year. A spokeswoman for Norwich Union in Dublin said it will be the autumn before any final decision is taken.

If the group goes ahead, holders of life assurance policies with the company are likely to receive cash or bonuses. In Ireland, Norwich Union has 183,000 life policyholders although it is not clear how many of these policyholders would qualify for free shares, cash or a bonus in the event of a flotation.

As of October last year, Norwich Union had assets of around £33 billion sterling, with life insurance, pensions, general insurance and health care operations, 30 percent of which are outside Britain. Around two thirds of the company's income of over £4 billion comes from life policies.

Norwich Union would need regulatory approval for flotation in many of the countries in which it operates.