The Lemoine Act, introduced by Representative Patricia Lemoine, aims to ease access to real estate credit. What changes does this new device entail?
1) The right to termination and amplification of information
The Lemoine Act allows people who have taken out a mortgage loan to cancel their borrower insurance contract at any time for free. This law entered into force from 1 June 2022 for new contracts and from 1 September 2022 for old contracts.
For greater transparency, banks and insurance companies must now:
- announce the cost of their borrower’s insurance for 8 years;
- notify the contract expiry date;
- and remind policyholders of their right to cancel their contract each year.
In case of failure to comply with these obligations, refractory insurance companies and banking institutions will have to pay a fine of 15,000 euros.
2) The right to be forgotten and the development of the reference network for the AERAS Convention
The right to be forgotten gives borrowers who have been cured of cancer for a certain period, without relapse, not to mention it in their health questionnaire. If the period was previously 10 years after the end of the therapeutic protocol for former cancer patients, it is now 5 years and also concerns hepatitis C.
The AERAS Agreement specifies two conditions for the right to be forgotten to apply:
- The insurance agreements involved must cover consumer loans, business loans and home loans.
- Insurance contracts expire before the borrower turns 71.
3) Removal of the health questionnaire
The Lemoine Act also prohibits requests for information regarding the insured’s medical condition.
This only relates to certain borrower insurance contracts, namely:
- if the insured part of the cumulative outstanding credit contracts does not exceed 200,000 euros per
- Repayment of the mortgage must be planned before the insured turns 60.
This abolition will facilitate access to mortgage loans without discrimination on grounds of health.
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