The MCCB has struck 78 mortgage intermediary firms from its register for failing to prove they have professional indemnity cover in place.
The Mortgage Board requires firms to have appropriate PI cover as a condition of registration. Removal from the register effectively removes the 78 offenders from the mortgage industry.
The MCCB has conducted a largescale review of its registered firms asking for evidence – by way of copy certificates – that the required cover is still in force.
The Board regularly receives information about the PI status of registered firms from other sources – such as through compliance monitoring visits – which it routinely follows up.
The MCCB says the 78 firms were given “every chance” to demonstrate their compliance, but ultimately failed to comply.
Luke March, chief executive of the Mortgage Board, says: “When we introduced requirements for PI insurance in 1999 we deregistered over 200 firms for not taking out the required cover. Our recent sampling project and swift response to evidence of breaches shows our effectiveness in eliminating bad practice and removing firms that pose a real risk to consumers.”
The Mortgage Board is vigorously extending its checks on PI cover. At the 2003 registration renewal, the Board will require documentary evidence from all intermediary firms that correct PI cover is in place before accepting an application for renewal. Previously existing firms were required to warrant that cover remained in place at registration renewal.
Also, the MCCB has proposed rule changes that will require firms to ensure that the Mortgage Board is noted as an interested party on their PI policy, in order to reduce the likelihood of a firm cancelling its policy without the Board's knowledge.
March adds: “As the sole industry regulator during the long transition period remaining ahead of statutory regulation, we will ensure that the consumer continues to be protected by the Mortgage Code's provisions and that the industry's standards and reputation continue to be raised.”