Dáil Éireann Debate, Thursday - 28 February 2019
228. Deputy Michael McGrath asked the Minister for Housing, Planning and Local Government if the decision to restrict mortgage protection insurance to certain insurance companies is a matter for local authorities; if the decision is made by his Department; the consumer protection laws both domestic and European that govern mortgage protection insurance; and if he will make a statement on the matter. [10162/19]
View answer229. Deputy Michael McGrath asked the Minister for Housing, Planning and Local Government the number of persons who have taken out mortgage protection insurance as part of the Rebuilding Ireland home loan scheme; the number of companies that have been used for this insurance; the average cost per month for mortgage holders; and if he will make a statement on the matter. [10163/19]
View answerI propose to take Questions Nos. 228 and 229 together.
It is a requirement that mortgage protection insurance (MPI) is taken out in respect of all local authority housing loans. The scheme applies to all house purchase loans approved by local authorities. One of the conditions of the scheme, which is a group policy, is that it is obligatory for all borrowers, who meet the eligibility criteria to join the scheme, except where their application has been rejected by the current insurance provider. Where a prospective borrower fails to qualify under the local authority MPI scheme, they must source comparable and alternative adequate cover elsewhere and provide evidence of this cover to the local authority. Therefore, for each Rebuilding Ireland Home Loan that has been drawdown to date, mortgage protection has also been taken out.
While there is provision under the Consumer Credit Act 1995, that where a lender offers a particular mortgage protection policy, in accordance with the requirements of that Act, the borrower can source an alternative policy to suit their needs, that provision does not apply to local authorities.
The local authority mortgage protection insurance scheme is overseen by the Mortgage Protection Committee which is a sub-committee of the County and City Management Association and consists of representatives from the CCMA, local authorities, the Housing Finance Agency and my Department. The policy is subject to periodic review and competitive tendering to ensure value for money for the policy holders over the entire life of the mortgage.
As the previous MPI contract (2012-2016) was ending on 31 December 2016, it was necessary to undertake a public procurement competition for the provision and administration of a new scheme from 1 January 2017 for a period of 3 years. As a result of the competitive process undertaken, there was no change in the insurance provider for the Scheme.
According to the most recent RIHL figures from the Housing Agency, as of the end of January, the average loan amount for all applications recommended for approval to date is €188,924. The current rate for the MPI scheme since the 01 January 2017 is 0.555%, therefore the estimated average monthly repayment for MPI is €87.38.
