Interest rate insurance

MARKETGUARD INTEREST RATE INSURANCE POLICY SUMMARY

Please read this policy summary carefully as it contains important information.

This policy summary does not contain the full terms and conditions of the insurance policy. You can read the the full terms and conditions here.

Who is providing the cover?

MarketGuard Insurance Company Limited is providing the insurance cover.

What type of insurance and cover does this policy give you?

The MarketGuard Interest Rate Insurance Policy will cover you against rises in your monthly mortgage payments directly caused by rises in Bank of England Base Rate which occur on or after the date the policy begins.

This policy covers the following types of mortgage (both repayment mortgages and interest only mortgages):

• a "Variable Rate" mortgage;
• a "Tracker" mortgage; and
• an "Expiring Fixed Rate" mortgage, by which we mean a fixed rate mortgage under which the fixed rate period is due to end within three months of the start date of the policy (and which will then become either a Variable Rate mortgage or a Tracker mortgage).

There are some types of mortgage this policy does not cover. For details please see below.

If you have an Expiring Fixed Rate mortgage, you may be concerned about the effect of rises in Bank of England Base Rate on the interest rate you will have to pay when your fixed rate period ends. If your mortgage becomes a Tracker mortgage at that stage a rise in Bank of England Base Rate will automatically be reflected in a rise in your interest rate. If your mortgage becomes a Variable Rate mortgage, a rise in Bank of England Base Rate can effect the level of your lender's Standard Variable Rate and this can lead to an increase in your monthly mortgage payments. Your lender's current Standard Variable Rate for mortgages may be higher than the fixed rate you are paying now. When your fixed rate period ends and you move onto your lender's Standard Variable Rate, your monthly mortgage payments may, therefore, go up. This policy does not protect you against this risk. But, if there is a rise in Bank of England Base Rate after the day the policy starts, and this directly causes an increase in your lender's Standard Variable Rate, so that the interest rate you eventually have to pay is higher than it would otherwise have been, you are covered for this part of the increase. Please see section 1.3 of the Policy Document for more information about this.

You are eligible to take out this policy if on the day the policy starts:

• you are resident in the UK;
• the total amount you owe under the mortgage is between £50,000 and £2,000,000; and
• you are due to make monthly payments under the mortgage for at least the 2 years from that day.

What are the main features and benefits of this policy?

The key benefits of this policy are:

• Protection. You are protected against increases in your monthly mortgage payments directly caused by changes in the Bank of England Base Rate. There are some increases that you are not covered for, please see below.
• It gives you peace of mind. It helps you to manage the burden of your monthly mortgage payments and plan your finances.
• It is quick and simple. One online form to fill in to get cover.
• You do not need to fill out forms to make claims. So you save time and hassle, if you are entitled to payment under the policy we will automatically pay this into your bank account without the need for you to make claims.

What am I NOT covered for under this policy?

The main exclusions and limitations of the policy are summarised here. For full details of what the policy covers and does not cover please see sections 1 and 2 of the policy document.

You are NOT covered under this policy for the following things:

• The "excess". You will not be covered for increases in interest rate your mortgage lender charges you up to the "excess". You can choose the level of "excess" when you apply for your policy (and this will affect the level of premium we charge you).
• Mortgages which are not Variable Rate mortgages, Tracker mortgages or Expiring Fixed Rate mortgages (e.g. mortgages with a fixed rate period that has more than three months left to run, capped mortgages or offset mortgages) or which are not or stop being eligible, see Section 4 of the policy document.
• If your mortgage lender charges you (or continues to charge you) a higher interest rate and this is not directly caused by an increase in Bank of England Base Rate which occurred on or after the policy begins. So, for example, you are not covered for increases in your monthly mortgage payments because:
  • an introductory or discounted interest rate or loyalty bonus no longer applies;
  • your mortgage lender introduces higher administration fees;
  • tax law or the way you are taxed changes.
• For the same reason, you are not covered for increases in your monthly mortgage payments which arise because of an increase in the interest rate under your mortgage above the level of a rise in the Bank of England Base Rate. If your mortgage lender decided to make an increase in the interest rate under your mortgage by more than the level of a rise in the Bank of England Base Rate, you would not be covered for the difference.
  
  Please see section 1.2 of the policy document for more information about this.
• If the Bank of England Base Rate goes up, but the interest rate under your mortgage does not. You are entitled to receive payments only if your monthly mortgage payments actually go up. So, if you have an Expiring Fixed Rate mortgage, no claim is possible until the end of the fixed rate period (but claims are possible after the end of the fixed rate period in relation to rises in Bank of England Base Rate during that period).
• If there is a fall in the Bank of England Base Rate, the interest rate under your mortgage may not go down as soon as this happens, or may not go down by as much. But you are not protected against this. So, if your mortgage lender is slow to reduce its interest rate to reflect changes in the Bank of England Base Rate, you are not covered for this risk. However, in these circumstances, we may in our absolute discretion choose to continue to make payments until the end of the month following the reduction in the Bank of England Base Rate.
• Losses above the "Covered Loss Amount", see Sections 1 and 2 of the policy document. When there is a rise in Bank of England Base Rate which increases the interest payable under your mortgage, we calculate the level of increase in your monthly mortgage payments:-
  • The "Covered Loss Amount" is our calculation of that increase and you will not be covered for losses over that amount.
  • We calculate the "Covered Loss Amount" by using a mathematical model which we think is consistent with market practice in the mortgage lending market. However, your mortgage lender may not use exactly the same mathematical model. So, the amount you are covered for may be smaller than the increase in your monthly payments. Please see section 2.1 of the policy document for more details.

In addition, you are not covered if you give us false information or withhold information.

Please ask for a copy of the policy document so you can check the cover and the exclusions in detail at www.marketguard.com/insurance.

How long does my MarketGuard Interest Rate Policy run for?

Cover starts on the date we agree with you and runs for 2 years.

Do I have a right to cancel the policy?

We hope you are happy with the cover this policy gives you. But if you decide that you do not want the policy, you can cancel it within 14 days after the date you purchased it.

We will charge you an administration fee for cancelling the Policy of up to 30% of your premium for this Policy. This fee will reflect our administration costs and expenses in providing you with cover between the Insurance Start Date and the date of cancellation.

You cannot cancel the Policy after the 14 day cancellation period has expired.

How do I make a claim?

You do not need to do anything to make a claim for payment. Each month we will work out what payments (if any) you are entitled to and automatically pay these in to your bank account on a monthly basis.

How do I make a complaint?

We aim to provide a high standard of service. But if you need to complain about any problems with the service you receive, please contact the Customer Services Manager at

MarketGuard Insurance Company Limited
260/262 Main Street
PO Box 1338
Gibraltar

or by emailing us.

We will acknowledge any complaint promptly. We will respond fully to it as soon as possible, but if we cannot do so within 20 working days we will write to you to update you on progress. If your complaint is about how the policy was sold to you by anyone other than the Insurer, we will pass the complaint onto the complaints manager at that firm and tell you we have done so.

If we cannot settle your complaint within 8 weeks, or you are not happy with the way we suggest settling it, you can refer it to the Financial Ombusdman Service. We will give you more information about how to do this.

Would I receive compensation if MarketGuard Insurance Company Limited were unable to meet its liabilities?

We are members of the Financial Services Compensation Scheme in the UK. If we cannot meet our obligations, you may be entitled to compensation from the scheme. If this happens, it may be possible for another insurer to take over your policy or give you a replacement policy. If not, the scheme covers 100% of the first £2,000 of a claim plus 90% of the rest of the claim. If you would like more information about this please write to:

Financial Services Compensation Scheme
7th floor, Lloyds Chambers
Portsoken Street
London E1 8BN
020 7892 7300
enquiries@fscs.org.uk

MarketGuard Insurance Company Limited is authorised by the Gibraltar Financial Services Commission. It is a member of the Association of British Insurers (ABI), and is covered by the Financial Services Compensation Scheme (FSCS) and the Financial Ombudsman Service (FOS).

Registered Address: 260/262 Main Street, Gibraltar. Co. Registration Number: 96625