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Insurance industry calls for LMI transparency in wake of COSL complaints

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Australian Broker | 02 Dec 2013, 08:00 AM Agree 0
The insurance industry has called for increasing transparency around Lenders’ Mortgage Insurance, after complaints to the Credit Ombudsman tripled in the past year.
  • Aarong | 02 Dec 2013, 09:28 AM Agree 0
    58 complaints instead of 20. So what? When numbers are this low to begin with its easy to say they have tripled. What if there were 2 last year and 6 this year? Would we need an enquiry? 20 vs. 60 is just about as ridiculous considering there are over 20 million people in the country. I've had enough of stupid, overarching, hamfisted, uneducated, patronising, needless regulation imposed on an industry that was the the best run one in the world. This was an industry that ran great when it was self regulated. I still marvel at the surprise that people have that when big brother took over our banking system, suddenly it started not working as well as it used to. What was the problem the NCCP cure fixed again?
  • Tony | 02 Dec 2013, 09:37 AM Agree 0
    LMI are playing god nowdays they are making decisions without any thought and are making decisions without any understanding and have no back bone when they need to be challenged and are unable to be contacted when it comes to challenging one of their decisions yes they have a place in the industry but are need to come back to the real world and and able to be contested on the decisions they make also the customer should be abel to get a written explanation from LMI on the decision they make and how they came to the decisions in writing so they can be contested it needed
  • Country Broker | 02 Dec 2013, 09:41 AM Agree 0
    Peter White is correct , if there is a refund because of a policy cancellation then the person who paid the premium ( the borrower) must receive that refund, even if the lender is the policy holder , if the lender retains the refund surely that is deceptive and unconscionable behaviour if it is not declared , it is something ASIC and the ACCC need to look at closley .
    In regards to the fact sheet , our aggregator has been using one for some time , and by giving that out it clarifies the position.
    I also am curious will the fact sheet declare that the lender is receiving an up front commission for each policy written?
  • Aarong | 02 Dec 2013, 09:56 AM Agree 0
    Just keep in mind when you advocate for refunds, explanations (as if they have to give them to you for some reason), and asking Asic to have a closer look, what you are really saying is that you want LMI to be harder to get and more expensive if you can get it. If you hate LMI, try living without it.
  • Country Broker | 02 Dec 2013, 10:07 AM Agree 0
    Refunds are being made now , that will not make LMI harder to get , it has nothing to do with underwriting standards and acceptance of a proposal . ASIC only needs to look at the concept of who is entitled to a premium refund when one is paid.
  • Old Joe | 02 Dec 2013, 10:14 AM Agree 0
    I hope in the policy disclosure statement there is a mention that the Insurers also take a risk and maybe someone in the mortgage industry can write an article about the bath the insurers took in the early 70's. Or is this another airbrush from an industry that can do no wrong. Also what deposit would we need if we have no LMI in place. Maybe Im cynical however this is what you get when too many people join the industry but don't like to know about its history.
  • Vee | 02 Dec 2013, 11:52 AM Agree 0
    if there are problems, then frankly it is just a case that the broker is not informing the customers correctly. spell it out to them in the first instance and should then be no problems. being totally open with your customers leads to no ugly surprises at the end of the day for both sides. quite simple actually.
  • Giles | 02 Dec 2013, 12:26 PM Agree 0
    With effectively only 2 LMI providers to the entire market, no wonder there are regular LMI price rises and a perception of lack of accountability and fairness. First Home Buyers are just like lambs being led to the slaughter. I have not seen any justification or scrutiny of the higher and higher rates being charged by these LMI providers. Of course these companies need to make reasonable provision for claims, but year on year record profits squeezed from the poor consumer, and no real alternative needs to be given serious attention by those charged to protect the consumer. Even more so where the provider is based off-shore.
  • Maria Rigoni | 02 Dec 2013, 11:00 PM Agree 0
    Hang on a minute... Let's get real banana peel... the value of lenders mortgage insurance, which was bought into being as a positive initiative for low deposit borrowers, has not changed since HLIC was introduced into the market place many years ago. Its purpose was to assist low deposit borrowers into home ownership.
    What has changed is a once government owned initiative has been sold into the private market and as a result borrowers are being exploited because they can be. The lack of integrity in the lending mortgage insurance space is conducive of the standard of integrity of the whole financial services system.
    And heaven forbid let us all hold our breath and wait for the predetermined outcome of the new financial services industry inquiry!!!
  • Eric | 03 Dec 2013, 07:42 AM Agree 0
    Too easy, get the industry to rename it from LMI to LMIB, "LMI for Banks". This should help those don't bother to read their agreement.
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