Dáil Éireann Debate, Monday - 11 September 2023
891. Deputy Pearse Doherty asked the Minister for Housing, Local Government and Heritage if he is aware of any disqualifications for applicants under the local authority mortgage protection insurance group scheme for underlying health conditions, specifically type 1 diabetes; and if he will make a statement on the matter. [37922/23]
View answer893. Deputy Thomas Gould asked the Minister for Housing, Local Government and Heritage if he is aware of issues with mortgage protection insurance for type 1 diabetics seeking a mortgage through the local authority home loan scheme; and if he will make a statement on the matter. [37968/23]
View answerI propose to take Questions Nos. 891 and 893 together.
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.
One of the conditions of local authority lending is that it is obligatory for all local authority borrowers who meet the eligibility criteria to join the local authority MPI scheme. Each application for MPI under the scheme is evaluated on a case by case basis. A local authority housing loan applicant, who is not eligible for the local authority MPI scheme, must source a suitable comparable individual MPI policy from the market before drawing down a Local Authority Home Loan.
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 in 2022. The contract resulting from this open tender competition came into effect from 1 January 2023. This new contract offers a change in the cover provided, from Disability and Life cover to Life cover only. This change in cover brings the MPI offered with the Local Authority Home Loan scheme in line with the MPI associated with home loans from commercial lenders.
As the previous MPI contract provided for disability and life cover it sometimes had more limited eligibility for those with certain underlying illnesses. With the current life only MPI group scheme, no medical conditions are automatically excluded, however certain chronic medical conditions may require that an application is assessed by the insurance companies underwriters before a decision on providing life cover is made. Therefore, depending on the specifics of the case, applicants with certain medical conditions may not obtain cover under the local authority MPI. However, as noted previously, if these applicants can get a comparable life only cover from the market then they can proceed with their loan drawdown.
