Tuesday, 3 November 2009
Dáil Eireann Debate
125. Deputy Mary Upton asked the Minister for Finance if his attention has been drawn to the more stringent criteria being operated by financial institutions with respect to mortgage protection policies, even for existing mortgages and policies, in particular that a credit institution (details supplied) guaranteed by the State, has increased the amount of time a policy holder must wait before making a claim in the event of accident, job loss or long-term illness; his views on whether such changes are inappropriate, particularly for existing policy holders; the action he will take to prevent such arbitrary changes to mortgage protection policies; and if he will make a statement on the matter. [37697/09]
Minister for Finance (Deputy Brian Lenihan): In recent months I understand that underwriters of payment protection insurance have been increasing their premiums in response to the rapid growth in unemployment which is leading to increases in claims and an increased risk profile.
I, as Minister for Finance, have no function in relation to the criteria for premiums being charged for payment protection insurance. However, I am informed that, while the Financial Regulator has no function in relation to the criteria being applied to premiums, this situation is being monitored to ensure that the Financial Regulators Consumer Protection Code is being complied with. The General Principles of the Code require that a regulated entity “acts honestly, fairly and professionally in the best interest of its customers and the integrity of the market”. In particular the Code requires a regulated entity must ensure that key items are brought to the attention of the consumer and that the method of presentation must not disguise, diminish or obscure important information. In addition information must be supplied on a timely basis, and where a regulated entity intends to amend or alter the range of services it provides, it must give at least one month’s notice to affected consumers.
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