Mr. Brendan O'Connor:

I will talk to the model case study we have given the committee. Under our split mortgage solution, on retirement we would assess the affordability of the person to see what he or she could pay. We would guarantee to give someone a lifetime interest in the house and, at that stage, that which cannot be paid would go on a further moratorium or split. It would be rolled up and we would recover it from the estate. It would roll up. We have stated that under our new model we would not go after anything more than the collateral value of the house. By definition there would be no residual debt on that. That is what practically happens in retirement.

Our reasonable living expenses guidelines are approximately 20% in excess of those of the Insolvency Service of Ireland. We do not get into the business and never want to get into the business of determining what people spend their money on. We have put on a premium to allow for that. We also add a premium in cases where people have child care. We will do it for certain medical expenses where there are particular recurring medical expenses, but we do not get into going down through people's expenditure in line-item detail. We have no wish to be the judge and jury of what people spend their money on. We have an absolute level that is based on the ISI model plus 20%.

The Chairman's last observation was whether they would be better in personal insolvency and perhaps the answer is they might be.

I suspect that if this runs through the ISI guidelines - where the reasonable living expenses will be lower - there will be more money available to pay the mortgage because the net disposable income will be higher and potentially some of their unsecured debt will be written down. We will write down unsecured debt as part of our own process. Where a customer has unsecured debt with AIB and where we are putting in place a solution, we will consider that also. I do not know the specifics in terms of their debt outside of this. However, I would think that, with insolvency and with this situation, they would not qualify for personal insolvency. They would still have the mortgage with personal insolvency.