In the near future, borrowers will be able to stop insuring their loans at any time, and in some cases, borrowers will no longer have to fill out questionnaires on health issues.
Contrary to all expectations, deputies and senators found a common language regarding insurance of borrowers. Parliamentarians signed the text of the new law on February 3, 2022, and then adopted it in the Senate on February 17.
Today it is possible to terminate the borrower's insurance:
- at any time within 12 months after signing the loan offer (loi Hamon)
- for each annual repayment period in two months.
Law on Oblivion reduced to 5 years
On November 25, 2021, the National Assembly passed the first reading of the PPL, which also stipulates that the incumbents will come together to enter into a new Aeras (Insurance and High Risk Borrowing) agreement, which will allow former patients to take out loans without any surcharges and/or exclusions from loan insurance guarantees.
Senators added the removal of medical questionnaires for individuals borrowing less than 200,000 euros (the amount fixed in the SMR). Patients with cancer and hepatitis C no longer have to list their pathology five years after finishing treatment, compared to decades ago.
Sharing risks at risk
Starting on June 1, 2022 for loans received after that date and starting on September 1, 2022 for previous loans. Thus, all borrowers will have the option to eventually cancel their bank's group insurance (whose premium is almost the same regardless of the age and medical history of the insured) in favor of individual insurance (whose premium is set according to the risk profile of the insured).
Report within two years
MPs, for their part, are concerned that removing the health questionnaire will also increase the level of tariffs. The CMP text therefore reduced the measure to loans of less than €200,000 and maturing before the borrower's 60th birthday. All this in order to reassure both parties, it is also expected that the Consultative Committee on the Financial Sector (CCSF) and the Prudential Regulation and Dispute Resolution Authority (ACPR) will submit a report to Parliament no later than two years after the adoption of the law, in which they will The consequences for insurers and for the insured of the introduction of the RIA and the removal of the health questionnaire were measured.
In addition to the “right to be forgotten,” which was reduced to five years for former cancer and hepatitis C patients, the text instructs Aeras signatories (banks, insurers, governments and patient associations) to agree to extend the measure to other diseases. Finally, this text improves information to policyholders: insurers will be required to notify them annually of the possibility of terminating borrowers' coverage.
Deputies make it easier to terminate insurance contracts for borrowers
Deputies confirmed the possibility for property owners to change the borrowers' insurance contract at any time, without waiting for the date of birth of the contract. This measure is enshrined in article 42 bis of the bill on the Acceleration and Simplification of Public Actions (Asap), which is currently being considered by the National Assembly and aims to simplify procedures for public authorities, businesses and individuals.
Simplification of procedures
Thus, the liberalization of the borrower insurance market, which is mainly dominated by banks (85% market), continues. Over the past ten years, several laws have changed (Lagarde, Hamon, Bourquin) to simplify the procedures for changing credit insurance contracts. Currently, it is possible to terminate a borrower's insurance contract during the first year of subscription and then on each anniversary thereafter.
According to MP Patricia Lemoine, who initiated the amendment, this mechanism will increase competition and, therefore, reduce prices. Over the course of the contract, borrowers can expect savings of between 6,500 and 15,000 euros on average, the parliamentarian said.
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