Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 1484: To ask the Minister for the Environment, Heritage and Local Government the reasons it is obligatory for all local authority borrowers in a local authority area (details supplied) to join the local authority mortgage protection scheme; if his attention has been drawn to the fact that some local authority borrowers are finding the cost of this scheme expensive; his views on permitting local authority borrowers to seek an alternative mortgage protection plan; and if he will make a statement on the matter. [32918/10]

Michael Finneran (Roscommon-South Leitrim, Fianna Fail)
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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.

Participation in the mortgage protection insurance scheme is compulsory for local authority house purchase loans for social and affordable housing. 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 Enterprise Trade 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.