From June 2022, the rules of home loan insurance change: right of termination at any time, removal of the medical questionnaire and right to be forgotten reduced to 5 years for people who have had cancer.
The reform of borrower insurance is underway. The bill “for fairer, simpler and more transparent access to the borrower insurance market”, presented by the deputy Patricia Lemoine, was definitively adopted on February 17, 2022 by the senators, after its passage in the joint committee parity on February 3. Published in the Official Journal of March 3, 2022, the law of February 28, 2022 aims to facilitate access to borrower insurance and to introduce more competition in this market. Objective: to enable borrowers to save on the overall cost of their loan insurance.
Borrower insurance guarantees, subject to conditions, the reimbursement in whole or in part of the capital remaining due or of the installments of the loan in the event of invalidity, incapacity or death, and possibly loss of employment. If the law does not require you to take out borrower insurance, in practice, a bank will only grant you a mortgage if you have death and disability insurance.
Borrower insurance: right of termination at any time
From now on, the borrower can change loan insurance at any timewithout waiting for the anniversary date:
- from the June 1, 2022 for new home loans,
- from the September 1, 2022 for current insurance contracts.
Currently, the borrower can change borrower insurance at any time during the first 12 months. Beyond that, it can change once a year, on the anniversary date of the signing of the loan offer. According to MP Patricia Lemoine, borrowers should be able to save up to €15,000 per credit file.
The obligation to inform policyholders is also reinforced. Each year, insurers must inform policyholders of the existence of the right to terminate and its methods of implementation.
Removal of the health questionnaire, under conditions
From June 1, 2022it will no longer be necessary to complete a medical questionnaire or perform a medical examination for home loans where the insured portion per person is less than €200,000. It is also necessary that the end of the repayment occurs before the 60th birthday of the insured borrower.
The removal of the medical questionnaire should allow borrowers considered to be more at risk (smokers, with health problems, etc.) not to bear additional premiums or exclusions from guarantees.
Reduction of the right to be forgotten period from 10 to 5 years
With the “right to be forgotten”, former cancer patients will no longer have to declare their illness to the insurance organization 5 years after the end of their therapeutic protocolcompared to 10 years currently when the cancer was diagnosed after 21 years. The right to be forgotten is extended to patients with hepatitis C under the same conditions.
In the next three months, the signatories of the Aeras convention (Insuring and Borrowing with an Aggravated Health Risk) are required to enter into negotiations to
- extend the right to be forgotten to patients with pathologies other than cancer,
- extend the reference grid to more pathologies which prohibits or regulates additional premiums and exclusions of guarantees,
- increase the amount of the borrowing limit (currently €320,000) affected by the Aeras scheme.
Failing agreement, the conditions of access to the Aeras agreement will be set by decree by July 31, 2022.