Loan insurance: what changes for borrowers on September 1

The second part of the February 28, 2022 Law to Access the Insurance Market for Borrowers in a More Equitable, Simple and Transparency manner, also called the Lemoine Law, shall enter into force on September 1, 2022. From this date, every borrower will have the possibility to change your loan insurance at any time, Subject to certain conditions.

Have you heard of the Lemoine Law? Originally known as the February 28, 2022 Insurance Market Access to Borrower Act more equitably, simply and transparently, it took its name from Representative Aguirre Patricia Lemoine, who implemented this reform.

After implementing the first part of June 1 for new borrowers, the Lemoine Act will now apply to all mortgages in progress from September 1, 2022.

Termination at any time

Concretely, what changes have been made? Since March 1, the right to be forgotten has moved from 10 years to 5 years for people who have suffered from certain diseases, such as cancer or hepatitis C for example.

Another major change: since June 1, in some cases, the insurance company He can no longer request information regarding the borrower’s health status. Obviously, this is the end of the health questionnaire, provided that the insured portion of the cumulative outstanding credit contracts does not exceed €200,000 per insured. This cap applies to everyone, meaning that two borrowers can be loaned up to €400,000 without having to fill out a medical questionnaire, as long as the credit is paid off before their 60th birthday.

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Finally, it establishes the law of Lemoine The right to terminate the borrower’s insurance at any time and without charge. So it takes its place from Hamon’s law (2014, which made it possible to change the borrower’s insurance at any time during the first year of the contract) Borken’s law (2017, which specified the possibility of changing the borrower’s insurance on each anniversary of the contract). From now on, borrowers will be able to choose another insurance contract at any time, provided that it is at least equivalent guarantees, This means that it covers the same situations (Death, temporary incapacity for work, disability, loss of independence, etc.) from the previous contract.

To make the change, you must therefore send a registered letter to your bank. The latter has 10 days to respond to your policy replacement request but may refuse to change insurance. However, in the event of a refusal, the latter must be informed and justified for a legitimate reason, for example unequal guarantees between the two contracts, as the website of the Ministry of Economy explains.

Expect to save better

Today, according to a November 2020 Financial Sector Advisory Committee (CCSF) report, 87.6% of borrower insurance contracts are still distributed by lending banks, as opposed to 12.4% of alternative contracts. However, the borrowers have every interest in considering this issue.

Save up to 70% On your borrower’s insurance

According to Magnolia.fr, the loan insurance broker, a 30-year-old borrower with a permanent contract who borrows 200,000 euros over 20 years will pay Approximately €60 per month of insurance by taking the group contract provided by the bank, for a total of €14,400. If the same borrower subscribes to an individual contract, he can expect it to be reduced to €15 per month, at a total cost of €3,600. For her part, Representative Patricia Lemoine made it clear to MoneyVox that the possibility to terminate the borrower’s insurance at any time would make it possible to achieve this. Average savings range from 5,000 to 15,000 euros for a loan of 250,000 euros over 20 years.

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In the face of these potential savings, some have already taken the initiative, notes Christophe Boesch, director of insurance at broker Meilleurtaux: There are clients who have expected a date of September 1 By starting the steps with the aim of sending their registered mail from the beginning of September The bank to make a change of insurance to the borrower. In fact, if the replacement request and its effect are only valid as of September, nothing prevents us from carrying out the initial comparison steps, starting today.

Faced with the influx of orders that will undoubtedly arrive from September 1, Christophe Boeich doubts the banks will be able to respond within 10 days, as required by law: we fear the banks are a little overwhelmed. enforce the law Very short lead time for the issuance of the amendment, ten working days, while so far it has been two to three months. First of all we will ask the banks for an invoice for 30 days, this is in the interest of the customer and the bank.

The fact remains that of all the households that could change a borrower’s insurance, it’s hard to predict how many people will actually look into it. We can make the comparison with Burquin and Hamon’s laws, notes Christoph Buesch. There were peaks in activity but it represented a decline in the group compared to the amount of French who could claim change. The May 2021 UFC-Que Choisir study proves him right: 89% of borrowers do not know the cost of their insurance to the borrowerAnd 77% don’t know when they can change it.

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