The chair of the Australian Registrars National Electronic Conveyancing Council (ARNECC) has written to the MFAA, confirming its lobbying efforts against proposed professional indemnity insurance legislation have been successful.
Last month, Australian Broker reported
on the MFAA urging brokers to support its lobbying efforts to stop changes to professional indemnity insurance legislation, which proposed an increase of professional indemnity insurance to $20 million in the aggregate, from a current figure of $2 million per claim and up to $6 million in the aggregate.
The MFAA claimed that, if passed, these changes would be a significant cost for broker businesses and could harm broker/client relationships.
However, in a letter to the CEO of the MFAA Siobhan Hayden, obtained by Australian Broker
, the chair of ARNECC, Brenton Pike confirmed that the MFAA’s lobbying efforts have been considered.
“I refer to your representations, including those most recently in through Hawker Britton, on behalf of mortgage brokers in response to the amendments being proposed by ARNECC to the Model Participation Rules (MPR) for electronic conveyancing,” he wrote.
“ARNECC has considered all of the representations received from industry participants and the representative associations and has finalised the next version of the MPR (Version 3) that has now been published…”
Among the amendments to the finalised Version 3, as a result of the MFAA lobbying, Pike confirmed that mortgage brokers – who hold or are covered by professional indemnity and fidelity insurance required by the NCCP – are deemed to comply with the insurance requirements for Identity Agents when conducting identity verifications of mortgagors for mortgage lenders.
This means mortgage lenders using mortgage brokers to originate their mortgages can have the mortgage broker conduct the verification for them.
“I trust this puts your and your members’ minds at rest that there is no obligation on regulated mortgage brokers to increase the level of insurance they hold nor any necessity for mortgage lenders and their brokers to change the way they originate their loans,” Pike wrote.