Kevin Humphreys (Dublin South East, Labour)
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Question 113: To ask the Minister for Finance the measures in place to help those who have endowment mortgages whose policies are coming to an end but may not have sufficient capital accumulated to pay the lump sum due a shortfall; the regulations that apply to this financial product; and if he will make a statement on the matter. [27356/12]

Michael Noonan (Limerick City, Fine Gael)
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I have been informed by the Central Bank that where the proceeds of an endowment policy are insufficient to repay the capital element of an endowment mortgage, borrowers should be given ample time to make alternative repayment arrangements. In addition, borrowers are afforded the protections of the 'Code of Conduct on Mortgage Arrears' in cases where the mortgage is in arrears or in pre-arrears and is secured by the borrower's primary residence. The Deputy may wish to note that, when the risks associated with endowment mortgage products were highlighted in the 1990s, specific provisions were incorporated into the Consumer Credit Act 1995 which require warnings to the effect that the proceeds of a policy may not be sufficient to repay a mortgage. Under the provisions of the Act, endowment mortgage savings plans must be reviewed by the life company at least every five years to check if the plan is on track to repay the mortgage. In this regard, a statement setting out the estimated revised valuation of the endowment policy at maturity must be issued by the insurer to the borrower. If the policy is not on track to repay the mortgage, the life company will recommend an increase in the premium.