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By Tim Neary
April 4, 2011
LMI providers are exploiting APRA loopholes to keep consumers in the dark, FBAA president Peter White has claimed.
Furthermore, White called their dismissal of his calls for LMI policies to provide a product disclosure statement for borrowers and act of "sneaking under the radar".
He had this to say to Australian BrokerNews: "They can sit back and argue how they like. I know it protects the lender, but the consumer is paying for this, and they're paying serious money. There's evidence before the Senate at the moment of premiums up to $24,000. In any other product in this country where the consumer is paying, there are disclosures and outlines of what the product does or doesn't do."
Also, White has called the idea of raising premiums to account for portability "money grabbing and profiteering".
Earlier Genworth had claimed that LMI portability would require a change to APRA capital requirements and could necessitate higher premiums.
In separate submissions to the Senate inquiry on banking competition, Genworth and the ICA disputed claims from White that LMI is a significant barrier to refinancing, and should be made portable.
They also dismissed White's calls for LMI policies to provide a product disclosure statement for borrowers, saying the policy covers the lender and therefore no PDS needs to be provided to the borrower.
Related Story
Yes to portable LMI, but expect higher premiums - Portable Lenders Mortgage Insurance could result in premium increases, Genworth's chief executive Ellie Comerford has said, due to its associated capital requirements.
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