Borrower insurance: is it possible to terminate your contract at any time?

Will this new attempt be the right one? The Committee on Economic Affairs of the National Assembly validated, on Thursday, November 18, a bill by the member of the group Agir ensemble Patricia Lemoine allowed the termination of borrower insurance at any time, a contract almost always required by banks when taking out a real estate loan to guarantee the payment of monthly payments in case of incapacity for work, disability or death of the subscriber, reports Capital. One year after it was rejected as part of the review of the Public Acceleration and Simplification (Asap) Bill, the measure is therefore back in the parliamentary debate. And this time it could be adopted. Explanations.

What you can already do with the law for changer d’assurance borrower

In recent years, various devices have been voted to liberalize the borrower insurance market. From 2010 and under Lagarde’s law, a borrower has the option of choosing a different insurer from the lending bank when taking out the loan, provided that the contract provides guarantees that are at least equivalent to those required of the bank.

Since 2014 and under the Hamon law, he can change his insurance contract during the first year after his son’s loan offer signature. And finally, since 2018 and the Bourquin amendment, he can change loan insurance on each anniversary date of the contract, provided that he gives at least two months’ notice.

More improvements are not the expected effect. “The lack of information on these rights is far too important today. Similarly, too many requests for replacement insurance, whether in the first year or the following, will not be answered within the time limits provided for by law (fixed at ten working days from receipt of the request).deploring Patricia Lemoine and the 20 co-signatories of the bill in the explanatory memorandum. Other practices are also found: flawed answers, erroneous objections to the equivalence of guarantees or even concealments on the expiration date of the insurance contract (for the “Bourquin” device) “.

As a result, the borrower insurance market, which accounts for around € 7 billion in annual premiums, is now held at almost 88% for banking institutions, which often charge higher rates than alternative insurers.

Big savings possible through termination at any time

Also, the signatory deputies want to establish a real liberalization of the market by opening the possibility of termination free of charge and at any time the borrower’s insurance. That “Allows for an average potential savings of between EUR 5 000 and EUR 15 000 (depending on the terms of the covered loan) for each asset file over the entire period”, according to them. However, the new contract will have to have the same guarantees so that the bank cannot oppose the request for resistance.

In addition, the bill strengthens the right of borrowers to information. Each year, the financial institution must inform the insured of his right to terminate as well as the terms and conditions to be observed. In the event of a request for termination, she shall have ten working days from the date of receipt for and to reply. Failure to comply with these obligations will result in an administrative fine from the DGCCRF of up to 3,000 euros for a natural person and 15,000 euros for a legal entity.

An entry into force in 2023?

The bill is now due to be debated in the National Assembly on November 25 as part of the parliamentary niche of the political group Agir Ensemble. But the text seems well on its way to being adopted. The government has committed to the accelerated procedure and Bercy supports them after The Argus of insurance. It remains that, even if the bill is voted by Parliament, the provisions discontinued in force only after the enactment of the law to allow “To industry actors to prepare for its implementation”.

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