what does the law on borrower insurance that Parliament has just adopted contain?

Adopted! Parliament ratified the “Lemoine Law”, Thursday, February 17, after a final vote by the Senate. Two weeks ago,MEPs and senators had agreed in a joint joint committee to change borrower insurance for home loans for the benefit of policyholders. This text, carried by the deputy Patricia Lemoine (Agir) and supported by the government, aims to introduce more competition in order to lower the costs for the consumer. We therefore summarize what will change.

Termination possible at any time

This is one of the main changes introduced by the law: policyholders can terminate their insurance at any time. Until now, this possibility was only open during the first twelve months or each year on the anniversary date. The objective is to “liberalize the insurance market and restore power to the French”, explained the rapporteur Patricia Lemoine in a joint committee. This measure, which already existed in the health and automotive sector, will come into force on June 1 for new contracts and on September 1, 2022 for current contracts.

In addition, insurers now have the obligation, each year, to inform their customers of the possibility of terminating their contract. They will also be required to communicate the full reasons for refusal, when they reject a request for termination. According to UFC-Que Choisir, this measure could allow French households to achieve an overall saving of 550 million euros per year. The possibility of terminating the contract at any time will make it possible to better negotiate the cost of the insurance or to find another cheaper one.

“We have 7 million borrowers in France who pay 7 billion euros in contributions per year”, explained on franceinfo Eric Maumy, president of April, leader in insurance brokerage. And according to him, the margin of negotiation is important: “If you play the competition, you will be able to obtain 50% savings” compared to what your bank can offer. Conversely, professionals in the sector warned against a risk of demutualization.

The less requested health questionnaire

Another major change: the removal of the medical questionnaire for loans of less than 200,000 euros and whose repayment date is scheduled before the sixtieth birthday of the insured. This theoretically concerns more than half of borrowers, explain The echoes. According to the broker Vousfinancer.fr, 52% of the files granted to its customers in 2021 indeed related to amounts lower than 200,000 euros. Insurers, on the other hand, will always be able to request a medical questionnaire from a certain age.

This provision represents real progress for many customers suffering from an illness (diabetes, cancer, heart, mental or respiratory pathologies, etc.). The latter must declare their pathology under pain of not being compensated in the event of impossibility of reimbursement. And their situation generates a significant additional cost in the calculation of the insurance. This supplement reaches between 50% and 100% for a quarter of patients and more than 100% for 21% of them, according to the broker Réassurez-moi, contacted by the magazine Capital.

Also according to this source, the provision should allow disease declarants to achieve an overall saving of 471 million euros. It remains to be seen whether this abolition will lead to price increases for all policyholders. “Reputational risk will encourage insurers not to start an upward price spiral”however pleaded Senator Daniel Gremillet.

The right to be forgotten fixed at five years

The legislator has also revised the right to be forgotten for patients who have completed their treatment for cancer or hepatitis C. It is now necessary to wait five years after a remission to no longer have to report it to the insurer, against ten years previously. This therefore halves the period during which additional costs can be imposed by the insurer. “Most of the patients could not take loans, or they obtained it on absolutely unbearable financial conditions”explained on franceinfo Céline Lis-Raoux, founder of Rose up, an association founded by cancer patients and relatives of patients.

This right to be forgotten had already gone from twenty years to ten years in 2016, during a revision of the convention “Insure and borrow with an aggravated health risk” (AERAS). A second best, according to Céline Lis-Raoux: “Before, you depended on an Aeras agreement, to borrow with an aggravated health risk, which means that you ended up with additional insurance premiums, even exclusions of certain risks such as death. People were obliged to insure their loan, otherwise the bank wouldn’t give it to them, but they were forced to accept insurance at unbelievable prices. Sometimes the loan insurance cost more than the actual repayment of the loan.”

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