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A major reform of creditor insurance came into force on June 1, 2022, and some detrimental consequences for consumers are already being felt. What are they ?
Up to 40% increase in borrower insurance contributions since June 1: this is the observation made by the spokesperson for Magnolia.fr, Astrid Cousin. For the comparator specializing in mortgage insurance, the fault lies with the implementation of the reform of borrower insurance, the Lemoine law. However, this reform aimed to make borrower insurance more accessible and to strengthen competition in a sector approved by bank-insurers. Why such a discrepancy between these objectives and reality?
End clap for the health questionnaire… and explosion of prices
Promulgated on February 28, 2022, the Lemoine law, named after the Agir deputy who carried out the project, Patricia Lemoine, wanted to give power back to borrowers. From now on, it is no longer necessary to complete a medical questionnaire when taking out a mortgage of less than 200,000 euros (per person, or 400,000 euros for a couple), the repayment of which ends before the age of 60. of the insured. Good news on paper, since it saves time and simplifies it, while offering better access to credit for people with a health problem.
And this is precisely where the shoe pinches: to compensate for the lack of data on the state of health of their customers, some insurance companies have decided to increase their rates. According to Astrid Cousin, prices have already increased “by 15% to 40% depending on the company, for an average increase of around 25%”. A real boom in prices since June 1, 2022, the date of entry into force of the Lemoine law, even though the deputy Agir promoted it as follows: “A useful law for many French people who will save money on their credit immovable”.
Read also: Real estate credit: 3 figures which show a tightening of the conditions for granting
Will borrower insurance contributions be able to increase indefinitely?
The end of the health questionnaire is not the only flagship measure of the Lemoine law. Indeed, the reform also provides the possibility of terminating its borrower insurance at any time, whereas until now it was necessary to wait for the annual expiry date of its contract. This gives policyholders the opportunity to benefit from better guarantees and/or a better price. This measure aims to boost the market by making the competition work harder.
While 88% of the market is held by bank insurers, in the vast majority of those who also grant financing, such a reform is therefore welcome, and could ultimately bring down prices. Specialized insurers or alternative companies, especially online, will thus be able to capture new market shares.
The Lemoine law, an evolving regulation
For Patricia Lemoine, “From September 1, the game of competition will be put in place for all contracts. Overpriced insurers will find themselves ousted from the market”. Why this September 1 deadline? Because the entry into force on June 1, 2022 only concerns new loans, and you will have to wait until September 1 to be able to take advantage of the Lemoine law for an already existing loan. Before this date, other changes may occur. Indeed, the Lemoine law is an evolving law, which can be modified by means of a decree of the Council of State.
On July 31, new additions could thus be decided, in particular the widening of the scope of the Aeras agreement, which allows people who present an aggravated health risk to access insurance for their credit. Senator LR Daniel Gremillet explains as follows: “There are a certain number of illnesses with which we live very well today and which have not resulted in an additional premium or a refusal of insurance”, for example for diabetes.