Irish investors are suing Norwich Union in London for helping them to invest in the troubled Lloyd's insurance market.

Two Irish investors are understood to have joined 64 UK investors in issuing a writ. All the investors face losing their family homes and one Irish family is thought to be involved in repossession proceedings here.

They are among 2,500 people, of whom 30 were Irish, who obtained guarantees from Norwich Union which allowed them to participate in the once lucrative Lloyd's market. The guarantees have since been withdrawn from sale after Lloyd's nearly collapsed from heavy losses.

The Norwich scheme involved the investor taking out an endowment and - if money was called for - taking on a mortgage from Norwich Union. In the Irish case many of these loans were passed to Norwich Irish Building Society. However, following the takeover of Norwich Irish by the EBS, the loans will fully revert to Norwich Union.

Norwich Union is now seeking reimbursement and repossession from many of the Names whose guarantees were called in.

Mr Geoffrey Hall, of the Norwich Union Action Group, said the group is suing because it believes that Norwich Union was aware of the problem Lloyd's was facing even as it was selling the policies, particularly through its re-insurance subsidiaries Norwich Winterthur Reinsurance and Stronghold Insurance.

Former Stronghold director Mr Allan Bridgewater was also chief executive of Norwich Union. It stopped underwriting re-insurance at Lloyd's in 1987.

Mr Vincent Sheridan, chief executive of Norwich Union Ireland, said that the case which has been brought in the UK would be strongly defended and that there is no similar case in Ireland.

He added that most of the Irish investors had been introduced through intermediaries or had approached Lloyd's themselves. "We would never have given advice on investing in Lloyd's," he said.

According to Mr Sheridan, there is no problem with most of the policies and a number of the guarantees are no longer in existence, while some are called in and some are servicing the debt.

Industry sources said the repossessions are unlikely to go ahead as Norwich Union would be likely to take other assets in lieu of the family home.

Norwich Union's exposure to the Lloyd's guarantees was about £300 million. Individual Irish losses ran from hundreds of thousands to several millions pounds.