What are the new features on the borrower insurance side?

Termination of Borrower Insurance at Any Time, Strengthening Insurer Obligations to Insured, Removing Health Questionnaire for Certain Mortgages, and Shortening Forgotten Rights, Legal on 28 February 2022 To the Borrower Insurance Market Fairer, simpler, and more transparent access will change the terms of your personal mortgage insurance policy.

It’s now easier to terminate a borrower insurance policy

The February 28, 2022 law, which is currently primarily in the hands of bank players with group contracts, to simplify the termination of borrower insurance contracts and liberalize the mortgage insurance market:

  • The borrower can terminate the mortgage insurance contract at any time during the contract period, without any fees or penalties, as soon as the loan offer is signed. This provision applies to new mortgage offers issued from June 1, 2022 and insurance contracts already in progress from September 1, 2022.

As a reminder : Prior to this law, borrowers could change their mortgage insurance in the first year of their subscription and then on each anniversary of their loan contract the following year.

  • Extend notification of termination request.

Previously, borrowers had to send a request to cancel their mortgage insurance policy by registered or electronic registered mail.

Now they will have more choices available to them. When they propose to conclude a contract by letter or other durable medium, by a declaration to the head office or the representative of the insurance company, or by an out-of-court act, or by the insurer by means of telecommunications. , The borrower insurance contract can be terminated, the same communication mode, or other means specified in the contract (insurance code article L113-14).

The obligations imposed on insurance companies have been strengthened

In parallel with the simplification of borrower dismissal procedures, the law on fairer, simpler and more transparent access to the borrower insurance market strengthens insurers’ obligations and provides for new ones.

  • If the lender refuses to receive insurance contracts other than the group contract as collateral, his decision to refuse is clear and must include all reasons for the refusal. If necessary, you need to specify the missing information and warranty for the new contract you want.

As a reminder : The lender may refuse to replace the borrower’s insurance policy with his group insurance only if the borrower’s insurance policy does not offer the same level of coverage as the group insurance policy he offers ( Consumption article L313-30).

  • Each year, the insurer, in paper or other durable medium, is subject to the right to terminate the borrower’s insurance, the conditions for terminating the contract, and the various notices and information that he must respect. You need to notify the insurer.

Violations of this obligation will be punished by administrative fines. The fine should not exceed € 3,000 for a natural person and € 15,000 for a corporation.

  • The lender must specify the cost of the borrower insurance for 8 years.

Expansion of the right to be forgotten

For several years, the AERAS Convention, “Insurance and Borrowing That Exacerbated Health Risks,” stipulates periods and deadlines for people suffering from serious medical conditions such as cancer to be denied premium increases or warranty exclusions. I am. Insurance contracts specifically aimed at guaranteeing mortgage repayments.

The agreement also provides for the right to be forgotten, which eliminates the need for policyholders to declare a cancerous condition to the insurer beyond a certain deadline.

In the past, this right to be forgotten depended on the age at which the cancer was diagnosed. Therefore, if the cancer is diagnosed before the age of 21, the right to be forgotten applies five years after the end of the treatment protocol. Twenty-one years later, it was applied 10 years after the end of the treatment protocol.

In the future, there will be no distinction based on the age at which cancer was diagnosed. The right to be forgotten is set at 5 years for all cancers. It also spreads to hepatitis C.

Abolition of medical questionnaires regarding specific mortgage contracts

The February 28, 2022 legislation on fairer, simpler and more transparent access to the borrower insurance market will begin on June 1, 2022, on the health of the insured or per insured. Loans with a share of less than € 200,000 and maturities before the insured’s 60th birthday.

This € 200,000 cap applies to each insured, so for couples it will be € 400,000 and all credit contracts combined will be considered.