For easier-to-read borrower insurance

Posted on October 19, 2021 at 9:56 amUpdated at 6:11 pm on October 19, 2021

Bankers and insurance companies agree to avoid unpleasant surprises for their customers. They have decided to enhance the information provided to borrower insurance subscribers, the Financial Sector Advisory Board (CCSF) announced Tuesday.

These changes in guarantees, such as contract prices, should allow us to “make (consumer) choices clearer and facilitate comparability of offers,” with representatives of the financial sector in press releases. Emphasizes consultative bodies among consumers.

At the request of Minister of Economy and Finance Bruno Le Mer, CCSF once again worked in this market as dynamically as it is being contested among bankers, insurance companies and brokers.

Insurance brought out by people who are in debt to buy a home guarantees full or partial coverage of their credit in the event of death, loss of autonomy, or even an accident or illness that leads to disability. Must be.

It is especially based on this concept of disability that bankers and insurance companies promise to provide more information. The 2020 report pointed out that this guarantee was one of the main reasons for customer complaints in borrower insurance.

“Disability 2”

Specifically, policyholders who were found to be “invalid 2” by social security were surprised that they could not take on credit using the “disability” guarantee of the contract. And this notes the CCSF, “even if they are covered by their contract under an incompetence guarantee.”

Incompetence compensation is intended to cover insured persons who are unable to return to work until their health has improved. Therefore, unlike failure guarantees, they are related to temporary situations.

In particular, the CCSF recommends that insurance agents “clearly” explain whether disability guarantees in contracts refer to the concept of disability recognized by social security “or other jurisdictions.” doing.

“Required” measures

If this is not the case, it must be made clear that being recognized as a disabled person by social security is “not binding on the insurance company”. The Bank of France (FBF) claimed on Tuesday that “the borrowers must carefully read these terms and conditions specific to the contract they have contracted and choose insurance.”

CCSF also recommends creating information about the price of the borrower’s insurance by showing the customer “cumulative premiums after eight years of insurance”. The idea is to help consumers find a way between premiums that can be fixed and calculated with initial capital, or reduced with unpaid capital.

This measure is “essential” for the Consumer Defense Association UFC-Que Choisir. “Insurance policies that seem interesting over the entire term of a loan may not be so when looking at the validity of this credit,” explains Matthieu Robin, project manager of the association.

Current status at the end

According to the 2020 CCSF, if a French borrows for a mortgage on average 19 years, the actual average term of the loan will be 8 to 10 years for early repayment, so this notion of valid duration is It is important.

Insurers and bankers, on the other hand, have not yet succeeded in introducing the termination of annual contracts and may further open up this market dominated by bank insurers. They certainly support maintaining the current cancellation framework on the anniversary of the contract.