Dáil Éireann Debate, Wednesday - 30 April 2014
521. Deputy Michael McGrath asked the Minister for the Environment, Community and Local Government if local authorities are permitted to require a person who is taking out a local authority mortgage to purchase life assurance through the local authority rather than on the open market; his views on whether this adds an additional unnecessary cost burden on mortgage holders; and if he will make a statement on the matter. [19676/14]
View answerThe local authority mortgage protection insurance scheme is overseen by the Mortgage Protection Committee which is a sub-committee of the County and City Managers Association (CCMA) and is representative of the CCMA, local authorities, the Housing Finance Agency and my Department.
One of the conditions of the scheme , which is a group policy, is that it is obligatory for all local authority borrowers who meet the eligibility criteria to join the scheme. Altering this condition would have a negative impact on the scheme and increase the cost for all existing borrowers.
The provision requiring that mortgage protection insurance is held by mortgage holders is contained in the Consumer Credit Act 1995. This legislation is the responsibility of the nister for Jobs, Enterprise and Innovation.
In terms of comparison to other schemes of mortgage protection, it is important to note that it covers disability as well as death and that the disability cover is for the full period of the disability and not just 12 months as is the case in the majority of MPI policies available.
The Mortgage Protection Committee which oversees the scheme endeavours to achieve a balance between the most economic rate to be charged for the scheme and the benefits provided. In negotiating a renewal of the scheme, which came into effect from 1 January 2012, the Committee were able to harness the downward pressure on pricing in the economy and secure an average 19% reduction on the rate which applied to the previous scheme.
