Lenders mortgage insurance has been identified by the Chairman of the Productivity Commission as a sector that warrants further scrutiny because customers may not be aware whether they are paying a fair price for the product.
It will be great to see an overhaul on the pricing structure of this, particulary on the Big 4 lenders that charge their LMI in house and don’t outsource to the likes of Genworth or QBE.
In comments made at the Australian Securities and Investments Commission Forum in Sydney this week, Peter Harris said he would be asking questions as to how this insurance is priced as it compiles its final report on competition for the government.
“We are interested in the competitive circumstances that set the price of that, simply because it affects a lot of loans and it’s quite a lot of money. You would expect to see this price competitively determined.”
Director – Solvere