From Public to Private

This paper examines the possible impact of further moves from public to private provision of mortgage payment insurance in Great Britain. The administrative costs of the two systems are compared, and distributional differences between tax and premium funding are evaluated, using national survey data. The constraints under which insurers must operate mean that private mortgage payment insurance is found to be limited in coverage, expensive for mortgagors facing average risks, and to have a regressive distributional impact when compared to tax-financed alternatives. Greater reliance on private insurance coupled with the withdrawal of state benefits could lead to higher costs for mortgagors who buy cover, and potentially disastrous costs for those who do not-some of which will eventually be borne by the state. Alternatives in the form of a compulsory national scheme (whether part of the public finances or at 'arms-length') or a mortgage benefit scheme are discussed

Actuarial science · Business · Casualty insurance · Economic growth · Economics · Health insurance · Insurance policy · Mortgage insurance · Payment · Private insurance · Public economics · State (computer science · Financial Literacy, Pension, Retirement Analysis · Housing Market and Economics · Housing, Finance, and Neoliberalism · Finance