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Borrower insurance: the consequences of the Lemoine Act

The Lemoine Act allows you to switch insurance companies at any time

Since June 1, 2022, Law No. 2022-270 of February 28, 2022 for fairer, simpler and more transparent access to the borrower insurance market, known as Lemoine’s law, redistributes the cards in the loan insurance market. Named after Patricia Lemoine, Agir deputy of the Coulommiers, this new law completes the provisions of the Lagarde law of 2010, the Hamon law of 2014 and the Bourquin amendment of 2018.

Since 2010, the rules have continued to develop in favor of consumers: free choice of insurance company when signing the loan offer, insurance delegationtermination on the anniversary date and now infra-annual termination (for everyone since 1 September 2022) and removal of the health questionnaire.

As noted by the loan insurance comparator Magnolia, the national assembly has already prepared an initial assessment regarding the effects of the Lemoine Actonly a few months after its entry into force.

Better competition between borrower insurance players

The Lemoine Act aims to open up competition in the loan insurance market. Today, most households opt for the group insurance offered by their bank due to lack of time or ignorance of the law. However, the contracts offered by alternative insurance companies are general cheaper for a similar level of warranty.

The Lemoine Law: “Art. L. 341-44-1.- The lender’s failure to comply with one of the obligations (…) is punishable by an administrative fine, the amount of which may not exceed 3,000 euros for a natural person and 15,000 euros for a legal person.

Since then, could be changed at any time and without insurance costs, will enable many households to save money. As for the health questionnaire provisions, they only concern mortgages of less than €200,000, the capital of which is fully repaid before the borrower turns 60. This second measure is not not without consequences for the rates of the insurance agreements as companies, which can no longer base prices on health risk, must pool these risks by passing them on to all their policyholders.

First assessment of Lemoine’s law

Implications of the Lemoine Act, delegation requests are now up to four times higher than those registered before September 1, 2022, Magnolia notes. For his part, the chairman of the April group estimates that alternative insurance companies’ market shares should increase from 15 to 25% in 2026.

The National Assembly apologizes for its part in its report increase in rates for alternative insurance companies which represents between 20 and 25%. An effect that is contrary to the original goal after the end of medical selection. The CCSF (Financial Sector Advisory Committee) has two years to issue a report analyzing the medium-term effects of the Lemoine Act.



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