Parliament waives the change of borrower insurance at any time

Posted on Oct 22, 2020 at 6:52 p.m.Updated Oct 22, 2020 7:52 PM

The French are not going to be able to change mortgage insurance at any time to try to make significant savings. On Tuesday, parliamentarians decided not to strengthen as much as some deputies wished competition in the loan insurance market bitterly disputed by bankers and insurers.

The senators and the deputies first of all decided to reinforce the obligations of information on these insurances guaranteeing the assumption of all or part of a mortgage when it can no longer be reimbursed as planned due to death or disability. or even loss of autonomy of the borrower.

A reminder every year

Thus, the insurer will be required to remind ” every year “ to the borrower, “On paper or any other durable medium, his right to terminate the insurance contract, as well as the terms of termination and the various notification and information deadlines that he must respect”, specifies the text adopted Tuesday evening by the parliamentarians meeting in joint joint committee (CMP) within the framework of the bill of acceleration and simplification of the public action and which were able to consult “Les Echos”.

The firing windows for a termination, however, remain unchanged. In other words, the French will always be able to change borrower insurance at any time during the first year of their loan and each year thereafter, on a given date. This status quo should disappoint consumer associations for whom the change “At any time” should allow individuals to save several thousand euros, or even more.

“A little disappointing”

The decline of deputies on the infra-annual termination also shower the hopes of brokers and insurers seeking at all costs to develop in this market, historically dominated by bank insurers. “It’s a bit disappointing” Agnès Bruhat reacts, managing director of the insurer Metlife France. Bancassureurs are regularly accused of putting obstacles in the wheels of policyholders wishing to move on to the competition. The supervisor was also led to bang his fist on the table on this subject.

The new information obligations constitute a “Good point which can still have an impact”, however believes Agnès Bruhat. Especially since the legislator specifies the rules of the game to prevent the borrower from struggling to find the information necessary for his termination and be discouraged from going further. The relevant date must be communicated as soon as the loan is taken out and corresponds either to “An expiry date provided for in the contract” either to “The anniversary date of the signing of the loan offer”, specifies the text of the CMP.

“A good balance”

“What matters is that the borrower has the information he needs”, welcomes Nicolas Théry, the boss of the Crédit Mutuel banking group, judging that Parliament has found the “Good balance” between borrower information, competition and risk pooling. Bancassurers have taken their side of competition by developing “alternative” contracts themselves.

However, they fought hard against the opening of the market over the past ten years, arguing that it would prevent them from pooling their risks and would ultimately lead to an increase in the cost of borrower insurance for people with the most risky profiles. An argument taken up by the executive to oppose the infra-annual termination.

A preliminary report from the Financial Sector Advisory Committee (CCSF), consulted by “Les Echos”, however judgesthan “ today, consumers are the main beneficiaries of all the reforms, notably with reduced tariffs and reinforced guarantees ”. And to report price reductions of up to 40%.

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