On February 6 the lender revealed that from that date Halifax Intermediaries General Insurance would no longer sell the cover via mortgage brokers.
It attributed its decision to the shrinking number of lenders offering the product due to the risks attached to it.
But Paymentshield, which recently raised its MPPI rates by 20% as a result of its underwriter Norwich Union’s concerns over rising unemployment, accuses Halifax of showing its true colours by stopping selling the cover via brokers.
Sandy McPherson, head of marketing at Paymentshield, says: “Players such as Halifax seem only to be committed to the broker market when it suits them but when the going gets tough they show their true colours and their pretence of support for the intermediary sector collapses.”
But Halifax has rebuffed this accusation.
A spokeswoman for the lender says: “The majority of the MPPI polices we sell through our retail network are to existing mortgage customers.
“We have a more comprehensive understanding of the financial circumstances of these customers which means we are able to offer them competitive rates and premiums that are priced according to individual risk.”
And Mike Fry, director of Halton Insurance Services, says Halifax’s withdrawal from the market will not have a significant effect on the majority of brokers, and that other providers will continue to offer the insurance.
He adds: “We do not sell a lot of MPPI but when we do we look at the whole market – we don’t necessarily take it from the lender the mortgage is with.”