Tuesday, 24 April 2012
Dáil Éireann Debate
486. Deputy Michael McCarthy asked the Minister for the Environment, Community and Local Government the options open to a person (details supplied) in County Cork; and if he will make a statement on the matter. [19839/12]
487. Deputy Michael McCarthy asked the Minister for the Environment, Community and Local Government his views on the manner in which mortgage protection policy for those in affordable housing is calculated at local government level; if his attention has been drawn to the concerns that many policy-holders have regarding the rate being of a blanket nature based on a group scenario rather than on individual profiles based on health and age, as is the case with independent policy providers; if his further attention has been drawn to the fact that this scenario results in considerably higher costs involved for policy-holders; if he has considered the fact that the general profile of a recipient of an affordable house is young and in good health, and in view of the above, if he intends to review this situation; and if he will make a statement on the matter. [19849/12]
The local authority mortgage protection insurance scheme is overseen by the Mortgage Protection Committee which is a sub-committee of the County and City Managers Association (CCMA) and is representative of the CCMA, local authorities, the Housing Finance Agency and my Department. One of the conditions of the plan, which is a group policy, is that it is obligatory for all local authority borrowers who meet the eligibility criteria to join the scheme. Altering this condition would have a negative impact on the scheme and increase the cost for all existing borrowers. The provision requiring that mortgage protection insurance is held by mortgage holders is in the Consumer Credit Act 1995. This legislation is the responsibility of the Minister for Jobs, Enterprise and Innovation.
In terms of comparison to other schemes of mortgage protection, it is important to note that it covers disability as well as death and that the disability cover is for the full period of the disability and not just 12 months as is the case in the majority of MPI policies available. The Mortgage Protection Committee which oversees the scheme endeavours to achieve a balance between the most economic rate to be charged for the scheme and the benefits provided. In negotiating a renewal of the scheme, which came into effect from 1 January 2012, the Committee were able to harness the downward pressure on pricing in the economy and secure an average 19% reduction on the rate which applied to the previous scheme.
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