L’Argus de L’Assurance takes stock of the Lemoine Law, one year after its enactment
Promulgated on 28 February 2022, the Lemoine Act was announced as a major measure to boost purchasing power by ensuring simpler and fairer access to property loan insurance. What assessment can be made one year after its enactment? L’Argus de l’assurance, the Infopro Digital group’s media brand, takes stock.
Fairer, simpler access to mortgage loan insurance
The Lemoine Act is named after Patricia Lemoine, MP for the “Agir Ensemble” group, who tabled the first bill on 22 September 2021.
This law, which came into force on 1 September 2022, aims to ensure fair and simplified access to property loan insurance, including the possibility of cancelling loan insurance at any time for individuals who have taken out a home or mixed property loan. Before September 2022, individuals wishing to change their loan insurance had little choice:
- Wait until the expiry date of the contract once a year, under the Bourquin Act (2017);
- Terminate the contract freely during the first year after signing the loan offer, under the Hamon Act (2014).
The Lemoine Act therefore introduced the option of cancelling within a year. In practical terms, individuals can now cancel their loan insurance at any time during the term of their loan, without penalty or due date constraints.
Banks, for their part, are under stricter obligations: they are required to inform customers each year of their right to change their contract at any time, to provide information on how to terminate their contract, and to give reasons for any decision to refuse to terminate their contract. Offenders are liable to administrative penalties of up to €15,000.
Lemoine Act: where do things stand? Time for a reckoning
How would you assess the Lemoine Act one year on? Have the French even heard of it? Have they exercised their right to change insurers? Has the Lemoine Act achieved its intended aims of loosening the grip on access to home loans by encouraging competition, and improving household purchasing power?
These are the questions posed by the editors of L’Argus de l’assurance, the Infopro Digital group’s media brand dedicated to insurance executives and decision-makers, as part of an original editorial study entitled “Loan insurance”.
An initial outline of the answer is provided in the information report on the implementation of the Lemoine Act, submitted on 9 November by the French National Assembly’s Economic Affairs Committee. Broadly speaking, the report gives a largely positive assessment of this first year, while highlighting a number of points to watch out for. For a more detailed assessment of the Lemoine Act, don’t miss the “Loan Insurance” editorial study by L’Argus de l’assurance scheduled for 2 June 2023!