insurance.  Change the borrower's insurance at any time in accordance with the Lemoine Law

insurance. Change the borrower’s insurance at any time in accordance with the Lemoine Law

1 . agoVerse June 2022, any new borrower can terminate their insurance contract at any time, free of charge and without penalty. It is no longer necessary to wait for the expiration date of your contract! For contracts in progress at 1Verse June, they will take advantage of this new right from September 1, 2022. This right to non-annual termination of the borrower’s insurance is one of the main actions of the Lemoine Act, which was adopted at the beginning of the year. some precision.

Non-annual termination of loan insurance

While some facilities have already been introduced in the borrower’s insurance sector (Hamon’s Law and the Borquin Amendment), policyholders can only terminate their contract in two cases:

  • Within 12 months of signing the loan offer.
  • Each year on the anniversary of the date of signing the loan offer.

Thus, there is a relative freedom going back in time, as borrowers now benefit from a non-annual termination right that allows them to change the insurance contract at any time to move to a more advantageous offer.

This measure already applies to loan offers signed from 1 June, and will relate to borrowers who signed their offer before this date from 1 September.

Note, however, that it will not be possible to use a non-annual termination to conclude an insurance contract with lower coverage. The guarantees of the new loan insurance contract obtained must be at least equivalent to those contained in the contract provided by the lending bank.

Only loan insurance contracts obtained by natural persons in the context of a loan used to finance a real estate project for residential use or mixed use (residential and professional).

Bright prospects for borrowers

While banks share the vast majority of loan insurance contracts, the Lemoine Act comes at the right time, both for borrowers as well as for specialist insurance companies.

Under the pressure of a little competition, banks can charge high and uncompetitive rates without having to worry about losing customers. On the part of offshore insurers, it goes without saying that the quasi-monopoly exercised by banks in the insurance market for the borrower was not a profitable situation.

Thanks to the non-annual termination, banks and insurance companies that specialize in insuring borrowers will have every interest in offering attractive offers to keep their customers and win over others.

So we can expect to see the borrower’s insurance market undergoing a revamp, with increased competitiveness and increasingly advantageous offerings. A huge step forward that would enable borrowers to make significant savings in the total cost of their credit, in the range of €5,000 to €15,000 according to MP Patricia Lemoine.

Other changes brought about by the Lemoine Law

If sub-annual termination is undoubtedly the measure of Lemoine’s law that has had the greatest impact, other provisions deserve attention:

  • Cancellation of the health questionnaire for housing loans whose final repayment is due before the insured’s 60th birthday and whose cumulative tolerance does not exceed €200,000 per insured.
  • The right to be forgotten by a 5-year short instead of 10 years for borrowers who have been cured of cancer or hepatitis C.

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