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ANZ suspends mortgage protection insurance offering

The major bank will no longer process applications for mortgage protection insurance from both new and existing customers.

The major bank has confirmed that until further notice, it will not accept applications for mortgage protection insurance (MPI) from both new and existing customers via its branch network or call centre.

ANZ has also advised brokers to refer clients requesting MPI to a qualified financial planner.

The bank added that customers with an existing policy or those who are yet to draw down on their home loan will continue to be serviced.

ANZ’s MPI product is offered through wealth business OnePath, which was purchased from ANZ by Zurich Australia in May 2019.

Mortgage Business is awaiting a response from Zurich regarding current arrangements relating to the provision of its MPI product.

ANZ’s announcement comes amid several underwriting changes introduced by stakeholders across the lending industry in lieu of the coronavirus (COVID-19) pandemic.

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Earlier this month, QBE Australia announced that it has imposed a temporary embargo on the provision of lender’s mortgage insurance (LMI) to borrowers employed in industries most affected by the crisis.

In a statement to Mortgage Business, QBE said it had already expected responsible lending obligations to “put a stop” to most lending to such borrowers.  

However, QBE said that in imposing the embargo, it aims to provide lender partners with clear guidelines regarding its risk appetite, adding that individual lenders would be free to request an exception.  

“The embargo provides clarity and consistency,” a spokesperson said.  

“We recognise the need to look at individual borrower’s circumstances and therefore all of our lenders have the ability to seek an exception to this embargo.”

Several lenders, including ING, Gateway BankMyState Bank, Heritage Bank, ME Bank and a number of non-banks have also imposed restrictions on such borrowers to maintain credit quality amid forecasts of a spike in defaults.

[Related: Mortgage insurer imposes LMI ‘embargo’]

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