Treasury select committee member Andy Love says amending the mortgage market review so protection products are discussed when someone takes out a mortgage could help close the protection gap.
Speaking in a Westminster Hall debate yesterday, Love said the protection market has collapsed in the wake of missold payment protection insurance and. He argued the Government needs to take action to address the resulting “protection gap”.
He cited research by Cuna Mutual which found 95 per cent of mortgages are sold without protection. Some brokers already use fact finds as a way into discussions about protection but there is no requirement to discuss it.
Love said: “With regard to the MMR, which sets the terms of the discussion between the customer and the lending institution, I am not aware that within the comprehensive discussion that is now required any room is given to insurance products to protect the loan.
“I would have thought that was one way in which the regulator could ensure that it is brought to the customer’s attention that they should get a protection policy, so that if things go wrong they can rest assured their loan will be insured.”