Holly Cairns (Cork South West, Social Democrats)
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226. To ask the Minister for Finance the steps that he is taking to require mortgage protection practices to accept medical evidence provided by general practitioners or consultants. [27200/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, there is a broad legal and regulatory framework in place which governs the provision of mortgages to consumers. 

Specifically in relation to mortgage protection insurance, section 126 of the Consumer Credit Act 1995 provides that mortgage lenders shall ensure that a mortgage applicant has a life assurance policy in place before granting a mortgage loan.  This is an important statutory provision which is designed to protect the borrower's dependants and their home should the borrower die before the mortgage has been repaid.  However, the Act also recognises that in certain cases such protection is not necessary or would not be appropriate and it provides for a number of limited exemptions to this statutory obligation.  These exceptions are:

- where the house in respect of which the loan is made is, in the mortgage lender's opinion, not intended for use as the principal residence of the borrower or of his/her dependants;

- loans to persons who belong to a class of persons which would not be acceptable to an insurer, or which would only be acceptable to an insurer at a premium significantly higher than that payable by borrowers generally;

- loans to persons who are over 50 years of age at the time the loan is approved;

- loans to persons who, at the time the loan is made, have otherwise arranged life assurance, providing for payment of a sum, in the event of death, that will at least cover the outstanding balance on the mortgage.

However, it should also be noted that, as a contractual matter, mortgage lenders could still require that a life insurance policy is put in place in such circumstances as a condition for the mortgage.

In relation to the operation of the life assurance market, the Central Bank expects the insurance industry to engage with its customers in an open, fair and transparent manner.  However, it is important to note that, subject to compliance with all relevant legal and regulatory requirements governing the provision of life assurance, that insurance underwriting decisions and the medical and other evidence required to assist such decision making are a commercial and business matter for the life assurance provider having regard to their own risk analysis.

Nevertheless, if an applicant for a mortgage and/or life assurance is not satisfied with the way a regulated firm is dealing with them, or they believe that the regulated firm is not following the requirements of the Central Bank’s codes and regulations or other financial services law, they should make a complaint directly to the regulated firm. 

If an applicant for a mortgage/life assurance is not satisfied with the response from the regulated entity to that complaint, the person may then submit the matter to the statutory and independent Financial Services and Pensions Ombudsman.