Dáil Éireann Debate, Wednesday - 20 March 2024
246. Deputy Steven Matthews asked the Minister for Finance if his attention has been drawn to concerns of an organisation (details supplied) regarding its clients’ difficulty in qualifying for mortgages, life assurance and other financial products; if his Department is carrying out any research into this issue or engaging with any financial institutions on this matter; and if he will make a statement on the matter. [12435/24]
Amharc ar fhreagraAs the Deputy is aware, neither I, nor the Central Bank of Ireland, can direct the pricing or provision of insurance products. This position is reinforced by the EU framework for insurance (the Solvency II Directive).
Officials in my Department have engaged with Insurance Ireland, the official industry body, for more information on this issue. It advised that when consumers are taking out a life assurance policy, companies will have to take the existence or potential of medical conditions into consideration and assess each case individually. Decisions on the cost and availability of these products depend on the individual circumstances of the applicant, such as age and health at application as well as past history. Consequently, consumers will generally be asked questions about various conditions including asthma, bronchitis, kidney disease, heart attacks and strokes, among others. However, different insurers can use slightly different criteria to assess this risk. In some instances, the risk presented by the applicant outweighs the risk appetite of the insurer and the application may be declined.
In the case of these applicants, this may be due to a risk linked to the medical condition or existing alongside the issues relating to the medical condition. If not already done so, Insurance Ireland have suggested the applicant contact the life insurers who have declined the case to request a detailed breakdown of why the medical condition has led to a decline, if they have not already received it.
It may interest the Deputy to know that that in order to assist clients who have had difficulty acquiring life cover due to a pre-existing illness, Brokers Ireland has published a register containing contact details of Brokers who have experience in advising on life cover in this area. This is available at: brokersireland.ie/life-cover-pre-existing-illnesses/
Specifically in relation to mortgages, as the Deputy may be aware, under existing legislation (Section 126 of the Consumer Credit Act 1995), lenders are permitted to provide a mortgage in situations where a borrower may be unable to obtain life insurance, or where such insurance is unduly costly compared to that payable by borrowers generally. For individuals, including those living with certain medical conditions, and who may experience difficulties acquiring mortgage protection insurance when securing a home loan, this is an important provision to be aware of.
In addition, in cases where a person has been refused a mortgage by a bank or another Central Bank regulated mortgage provider, the Deputy may wish to note that eligible borrowers, including where the applicant can provide proof of insufficient mortgage offers of finance from two regulated financial providers, can apply to the Local Authority Home Loan Scheme, which falls within the remit of the Department of Housing Local Government and Heritage.
As the Deputy refers to in the details supplied, in June 2023, Insurance Ireland and its members published a Code of Practice for Underwriting Mortgage Protection Insurance for Cancer Survivors. This entered into force on 6 December 2023.
Under the Code, insurers will disregard a cancer diagnosis where treatment ended more than 7 years prior to application (or more than 5 years if the applicant was under 18 at the time of diagnosis). The Code will apply to mortgage cover applications of up to €500,000 for a principal private residence. Insurance Ireland estimates that this threshold covers over 90 per cent of mortgage protection policies in the market. My officials continue to engage with Insurance Ireland regarding the implementation of the Code, and will closely monitor the outcomes.
In order to promote confidence in the application of the Code, Insurance Ireland will appoint an external reviewer to ensure that the provisions of the Code of Practice have been implemented and are being adhered to. A report on this will be made available to relevant stakeholders.
The first review will take place in January 2025, in order to review implementation, with the next review due in 2028 and every three years thereafter. The Code of Practice will also be considered in line with every review, which will include the definition set out within the document.
