Announced on August 16 and published in the Official Gazette of August 18, Law No. 2022-1158 of August 16, 2022 on emergency measures to protect purchasing power falls within the framework of rising prices for consumption, and in particular the price of energy, linked to the conflict in Ukraine. It pursues three imperatives: protection of household living standards, consumer protection and energy sovereignty.
Title II of the Act is more specifically devoted to consumer protection. In this perspective, a chapter is 1eh is devoted to the termination of contracts, which is intended to be facilitated. Sections 17 and 18 in particular contain provisions on the termination of the insurance agreement.
Termination “in three clicks”
Article 17, I, of the law of 16. August 2022 amends article L. 113-14 of the Insurance Act, regarding the notification of termination of the insurance agreement by the insured. The latter currently provides that when the insured has the right to terminate the contract, notice of termination may be given either by letter or on any durable medium or by declaration made at the head office or at the insurance company’s representative or out of court. act, or, when the insurance company proposes to enter into the agreement by a remote means of communication, by the same means of communication or in another way as stipulated in the contract. The insured freely chooses one of these methods. In practice, termination by registered letter is the easiest and most used means, both by insurance companies and by policyholders (see in this sense Y. Lambert-Faivre and L. Leveneur, The Insurance Act14e ed., Dallas, coll. “Précis”, no. 295). The recipient of the termination, in turn, confirms receipt of the notice in writing.
In the future, the termination of the contract will be facilitated, since according to article 17 of the law, “when an insurance contract covering natural persons outside of their business activities is concluded electronically or is concluded in another way, and that the insurance company, on the day of the subscriber’s termination gives the subscriber the opportunity to enter into contracts electronically, termination is possible according to the same modality”. In practice, therefore, the insured will be able to terminate the insurance agreement online using an “undo button”, regardless of whether the agreement was originally entered into electronically or not. The only condition is that the insurance company on the day of termination offers an online subscription service.We are betting that at the time of dematerialization this “three click” termination option will be wide open.
Article 17 of the Act continues by specifying that the insurance company provides a free functionality which makes it possible to carry out the notification and the necessary steps to terminate the contract electronically. He adds that these provisions shall enter into force on a date fixed by decree, which cannot be later than 1eh June 2023. From 1eh By June 2023 at the latest, insurance companies must therefore have an easily accessible online “cancellation button”.
These provisions are part of a general trend that makes it possible for the insured consumer to easily terminate the insurance contract. Law No. 2014-344 of 17 March 2014 on consumption, known as the “Hamon Law”, had already marked a major development by giving consumers the option of infra-annual termination. For insurance contracts that fall within certain industries (these are particularly covered by article R. 113-11 of the Insurance Act, car insurance and home insurance), and which may be tacitly extended, the insured may terminate at any time without charge. or fine and without notice, at the end of the period of one year from the conclusion of the contract (on the contributions of the Hamon law with regard to insurance contracts, v. J. Bigot, The Hamon law and the insurance contract, JCP 2014. Doctr. 634) . After having been facilitated in reality, the termination will therefore be further facilitated, this time on the form, by law of 16 August 2022.
We can welcome this desire to facilitate the termination of the insurance contract, which will give consumers an easier opportunity to benefit from the most attractive offers on the market. However, a limit can be raised. There is a risk of easy termination of the contract. It will be enough for the insured to click a simple button online. However, the termination of an insurance contract should not be taken lightly. It leads to the termination of the contract and brings the obligations of the parties to an end. The insurer’s guarantee therefore disappears for the future (on the effects of termination, see Y. Lambert-Faivre and L. Leveneur, up. cited, no. 299). In this sense, we can only approve the continuation of Article 17, which obliges the insurance company to inform the insured, when it confirms receipt of the notice of termination, of the date of termination of the contract and the effects of the termination in a durable medium and within a reasonable time . This obligation to notify will therefore probably draw the insured’s attention to the consequences of the termination.
It remains to be determined what the technical modalities for the implementation of this “cancel button” will be. Indeed, this facilitated termination of the contract is not without raising practical problems: how can one be sure that the one terminating behind the computer or smartphone screen is actually the insured? How exactly should this button be? On this point, Article 17 specifies that a “decree must establish in particular the technical methods that can guarantee the identification of the subscriber as well as easy, direct and permanent access to the functionality mentioned in the second section of this II, such as conditions of presentation and use. It determines what information the subscriber must provide”. We will therefore have to wait for the decree to know concretely what the means will be implemented. One can imagine, for example, that it will be necessary to connect with an identifier and an associated password to terminate the contract.A double verification procedure could also be considered, similar to what exists for online payments.
Section 18 of the Act, the provisions of which enter into force on 1eh January 2023, makes changes regarding affinity insurance, sold as a supplement to a product or service, also called “warranty extension”. Article L. 112-10 of the Insurance Act currently provides that the consumer who enters into an affinity insurance contract can, if he can prove that he has a previous guarantee for one of the risks covered by this new contract, waive it on this new agreement. without charge or penalty, and as long as it is not fully performed, or the insured has not invoked any guarantee, within fourteen days of the conclusion of the contract. This right of waiver had been introduced by the Hamon Law of 17 March 2014 and had been criticized for its complexity. In particular, this meant that in practice the insured could check within a fortnight whether he already had sufficient cover. Some then believed that it would have been simpler to offer the consumer a right of termination (see J. Bigot above).
Article 18 of the law of 16. August 2022 naturally tends to simplify the process. It provides for the deletion of the words “if he presents evidence of previous coverage for one of the risks covered by this new contract”, meaning that the subscriber can terminate the contract without having to justify this waiver by the fact that the already covered. It is therefore no longer a matter of forcing the insured to check whether he already has sufficient coverage. The last two occurrences of the word “new” are therefore deleted. In addition, the waiver period is extended, as it goes from fourteen to thirty days. It is added that “when the insured benefits from one or more free insurance premiums, this period only runs from the payment of all or part of the first premium”. The contract waiver period is thus not only longer, but its starting point is postponed in the event that the insured benefits from one or more free premiums. It does not start to run until the payment of the first premium. In practical terms, the subscriber could thus terminate the contract several months after its conclusion, without having to justify an already existing guarantee, in order to possibly take out another, more advantageous guarantee.
Articles 17 and 18 of the law of 16. August 2022 thus pursues the declared purpose, which is consumer protection. They allow him to easily cancel an insurance contract and take advantage of the most attractive offers on the market. There are still questions. Regarding termination by electronic means, we still have to wait for the decree, which will determine the practical conditions. We also reserve the right to the risk of too easy termination. It is important that the insured is aware that by clicking on a simple button, he makes the cover, sometimes mandatory, disappear. Correct information to the insured about the consequences of termination is, in our opinion, a decisive point. The protection of an individual as a consumer should not lead to less protection of the same person, this time as insured.