Skip to main content
Normal View

Housing Schemes

Dáil Éireann Debate, Wednesday - 26 January 2022

Wednesday, 26 January 2022

Questions (80)

Réada Cronin

Question:

80. Deputy Réada Cronin asked the Minister for Housing, Local Government and Heritage the reason that the compulsory mortgage-protection element of the local authority home loan scheme, formerly Rebuilding Ireland, involves just a single State-appointed insurer; the way in which and the reason that insurer was appointed; and if he will make a statement on the matter. [3949/22]

View answer

Written answers

The local authority mortgage protection insurance (MPI) scheme has applied to all house purchase loans approved by local authorities after 1 July 1986, including the Local Authority Home Loan introduced on 4 January 2022.

It is important to note that there are a number of differences between the local authority MPI scheme and standard MPI products available on the market. Most notably, the current local authority MPI covers mortgage repayments in case of borrower disability, which is not part of standard MPI. In addition, the local authority MPI scheme offers a single group rate per €1,000 sum assured to all participants in the scheme as opposed to standard MPI products that are individually priced based on a member’s age, amongst other factors.

In summary, the local authority scheme provides benefits not typically available under standard MP products;

Mortgage repayments are paid if there is a valid claim as a result of disability;

Separate to life cover, an additional €3,000 is payable in the event of a member’s death

Members are covered for death up to age 75, where as standard MPI cover usually ceases at the age of 65.

The scheme is subject to periodic review and competitive tendering in accordance with the terms of EU Directives relating to the award of public service contracts. This is to ensure that the most appropriate cover at the best value for money is secured for local authority borrowers over the entire life of their mortgages.

The most recent public procurement competition for the provision and administration of this MPI scheme was conducted by the Local Government Management Agency. The contract resulting from this open tender competition came into effect from 1 January 2022 and is due to expire on 31 December 2022. My Department will review the provision and administration of the MPI scheme prior to that date

Top
Share