Question about life insurance being a mortgage condition

misschicken

Hello,

I fully understand that a bank can make life insurance a condition of a mortgage and that life insurance being a mortgage condition was common practice until the late 90's or thereabouts. I'm trying to find out when HSBC/Midland would have stopped making it a condition of their mortgages. They've pointedly ignored my request for this information as part of an on-going complaint I have with them and have now issued a final response so there's no further dialogue. Does anyone know or know how I can find out?

Many thanks

magpiecottage

Unfortunately it is unlikely that anybody knows - the information is probably held in an archive somewhere but most financial institutions made those who knew where to find it redundant and took in younger (and cheaper) replacement staff.

Did you actually buy a policy through the bank or an IFA?

When did you buy it?

And who is the insurer?

dunstonh

Even if you find out when the date changed that life assurance was no longer a mandatory requirement, you then have to prove it was mis-sold. Chances are, given the dates you are looking at, there will be little or no documentary evidence and the only possible scope beyond that is if you had no financial need for it (i.e. single, living alone, no children).

magpiecottage

Whilst you might not have needed cover for personal reasons, the requirements of a lender are a matter of commercial judgement and therefore outside the jurisdiction of FOS.

If you purchased the cover through the bank, it would have been set up with HSBC Life (or Midland Life as it was) which is a separate legal entity from the bank itself.

The insurer is responsible for the sale of the policy but NOT for ensuring its ongoing suitability.

Consequently, whilst I understand your frustration, I do not think there is any realistic prospect of getting a complaint upheld.

[Deleted User]

HI,

misschicken wrote: »

The bank have confirmed that it was a condition at the time I applied for my mortgage but have refused to even acknowledge that I've repeatedly asked when it stopped being a condition or why I wasn't informed, I must be using invisible ink.

if it was a condition when you took out the mortgage, then that was what you agreed to.

When it stopped being a condition wouldn't affect your agreement.

dunstonh

The bank have confirmed that it was a condition at the time I applied for my mortgage but have refused to even acknowledge that I've repeatedly asked when it stopped being a condition or why I wasn't informed, I must be using invisible ink.

That is the complaint done and dusted then. It only matters when you take it out. Not what may happen in the future. The fact it changed later does not make it a mis-sale.

I can see where you are coming from but it is one of those situations where no one can tell you dont need it other than a financial adviser. If you didnt see a financial adviser then they couldnt tell you.

dunstonh

The sale was made by a financial advisor the bank arranged to call me, if that makes a difference.

The financial adviser has done no wrong though.

So does this mean, purely as an example (not having a moan), that anyone who was single/no dependents who took out a mortgage in the 90's when the banks were routinely making life insurance a condition still has to continue to pay for the cover despite it being useless to them while other people who are single/no dependents who took out a mortgage a little bit later don't have to and if they were advised to buy the cover it would be considered a mis-sale?

It would not be a mis-sale. Look at the facts at point of sale.
1 - lender insisted on mortgage
2 - adviser arranged insurance as you wanted the mortgage.
3 - If you refused to take it out, you would not get a mortgage.

So, where is the mis-sale there?

Even today the banks can insist on insurance. They often do it on business customers still.

What I sort of don't understand then is why the bank haven't just said it remained a condition of the mortgage and that's what I agreed to, the end. They've said I had the option to cancel it but I didn't and if I had any concerns I should have raised them earlier.

At point of sale is where the advice was given. The advice was correct for the time. The adviser cannot be responsible for unforeseen changes that occurred further down the road.

You did have the option to cancel later. They couldnt tell you as they had no way of knowing that the life assurance was linked to that mortgage. The insurer wouldnt know and the lender wouldnt know. Sharing the logo doesnt mean they can share other information.

misschicken

Thank you. That makes it clearer.