Mr. Paul Joyce:

It is correct. The only obligatory insurance is life cover under the terms of section 126, but as Mr. Deeter said and as I said earlier, many of those policies have lapsed, because people are in arrears. It is obligatory because often the borrowers are joint borrowers. The death of one party is a final event, and the cover is there to pay off the principal for the remaining spouse and, often, children. Therefore, it might be seen as an essential insurance. Redundancy protection policies have been in place, as well as policies for critical illness, and so on. As I understand it, the premiums are quite high and there has been a fair degree of mis-selling. For example, people on fixed-term contracts were sold policies that only apply to people in permanent employment. Very little checking went on at the time. People were sold critical illness cover only to find that the illness they suddenly develop is not on the defined list of illnesses under the policy, and so on. Reference was made earlier to the true cost of the mortgage, the energy costs and so on. One must also factor in the various types of insurance one might take out - life cover and so on. If one adds in another element of a mortgage insurance scheme, which is taken out in the lender's name, but effectively must be funded by the borrower, affordability becomes more of an issue.