Michael McGrath (Cork South Central, Fianna Fail)
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Question 30: To ask the Minister for Finance his plans to introduce new universal mortgage indemnity insurance to protect borrowers from the future risks of negative equity; and if he will make a statement on the matter. [7093/11]

Michael Noonan (Limerick City, Fine Gael)
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Mortgage Indemnity Insurance acts as a form of additional security for the mortgage lender in the event of default by the mortgage holder. While either the lender or borrower can be responsible for paying the premia, it is the lender alone who will receive the proceeds of any claim. The borrower will still retain the same legal responsibility to pay the mortgage shortfall, where such arises, whether mortgage indemnity insurance is in place or not. The Expert Group on Mortgage Arrears and Personal Debt did not consider the issue of introducing mandatory mortgage indemnity insurance in any detail. However, it did note the following: " ... given the current housing market and lending conditions, the Group does not consider that imposing such products [in reference to mortgage indemnity insurance and mortgage repayment insurance] is necessary or a priority. However, the Group considers that such issues should be reviewed in the future." (MAPD Final Report, 2010)

There are no proposals in the Programme for Government 2011-2016 to introduce universal mortgage indemnity insurance in the mortgage market.