This week the Hungarian National Bank (MNB) unveiled a new DLT platform involving the country’s main banks and insurance firms. It provides a blockchain-based database to coordinate data sharing about insurance policies needed to support mortgage loans.
For new mortgages, typically the borrower will visit the bank for the mortgage and then again to demonstrate they have secured the necessary insurance. Banks require the insurance cover to protect their collateral in case of floods or other major damage that could reduce the value of the house. By creating the DLT network, the second visit by the house owner isn’t necessary. For existing mortgage holders who switch insurers, they also no longer need to visit the bank.
The DLT Home Insurance system was jointly developed by the central bank and the insurance and banking industries. Eight mortgage providers and eleven insurers are involved and expected to join the network by mid year. The Hungarian market has 622,000 home insurance policies that include a mortgage cover clause.
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