Mortgage Insurance (Hansard, 8 December 1994)

§ Mr. Denham
To ask the President of the Board of Trade what action he is taking to limit the costs of premiums of mortgage insurance policies.

§ Mr. Jonathan Evans
None. The Secretary of State's powers under the Insurance Companies Act 1982 are primarily concerned with the solvency of insurance companies and, except where such matters are concerned, he does not intervene in their day-to-day business.

§ Mr. Denham
To ask the President of the Board of Trade what plans he has to make it a requirement for298W providers of mortgage insurance to make full disclosure of management and similar costs at the point of sale of mortgage insurance.

§ Mr. Jonathan Evans
No. This would not be appropriate. The United Kingdom general insurance market is already highly competitive. In addition, the Association of British Insurer's general business code of practice requires insurance intermediaries not to impose any charge in addition to the premium required by the insurer without disclosing the amount and purpose of such charge and to disclose, on request, the commission.

§ Mr. Denham
To ask the President of the Board of Trade (1) if he will make it his policy to ensure that mortgage insurance policies allow those individuals claiming under their policies to take short-term employment without losing their right to continue to claim under their policies when that period of employment concludes;
(2) what action he is planning to take to ensure that providers of mortgage insurance limit increases in premiums for those individuals who have previously suffered a period of unemployment;
(3) if he will make it his policy to require insurers to provide mortgage insurance to the self-employed, to those on fixed contracts and to those in part-time work.

§ Mr. Jonathan Evans
No. This is a matter for the underwriting judgment of individual insurance companies.

§ Mr. Denham
To ask the President of the Board of Trade what is his estimate of the total annual cost in premiums if all mortgages taken out after October 1995 were to be covered by mortgage insurance for the financial year 1995–96 and each of the following four financial years.

§ Mr. Jonathan Evans
It is not possible to provide a realistic estimate because mortgage lending in the period in question cannot be predicted.

§ Mr. Denham
To ask the President of the Board of Trade what is his estimate of the total amount paid out on mortgage insurance policies in the last full financial year for which figures are available.

§ Mr. Jonathan Evans
The Association of British Insurers estimates that claims paid in 1993 amounted to £156 million.

§ Mr. Denham
To ask the President of the Board of Trade what is his estimate of the total premiums paid in mortgage insurance for the last full financial year for which figures are available.

§ Mr. Jonathan Evans
The Association of British Insurers estimates that premiums paid for mortgage protection insurance in 1993 amounted to £220 million.

§ Mr. Denham
To ask the President of the Board of Trade what is his estimate of the number of mortgage insurance policies currently in operation which cover(a) 50 per cent. or more and (b) less than 50 per cent. of the full cost of the associated mortgage for (i) one year or less, (ii) two years or less, (iii) three years or less and (iv) more than .three years.

§ Mr. Jonathan Evans
The Association of British Insurers estimates that some 1.1 million policies are in force. Generally, policies cover 100 per cent. of the cost of the associated mortgage. The ABI estimates that 90 per cent. of the policies will pay up to one year and 10 per cent. up to two years. The ABI is not aware of any policies that pay for more than two years.