Credit life and disability insurance
Cover that repays the lender on the borrower's death, disability or work incapacity, long sold as a group product by the lending bank itself.
A borrower can now cancel loan insurance whenever they like. France's Lemoine Act of February 28, 2022 allowed it from June 1, 2022 for new contracts and from September 1, 2022 for all contracts in force. It was the last step of a dismantling that began with the Lagarde Act of July 1, 2010. The cover repays the loan on the borrower's death, total and irreversible loss of autonomy, disability or work incapacity. The benefit goes to the lender, up to the insured share, and the household keeps its home when the estate is settled. For years the lending bank sold it as a group contract. It collected the margin and had no reason to cut the price, while the borrower, eyes on the loan rate, did not shop around. Lawmakers moved in stages: free choice of insurer at inception, substitution in the first year, then at each annual renewal, and finally at any time. Equivalence of cover remains, which the lender assesses against a list of criteria set by France's financial sector advisory committee (CCSF).
France's Lagarde Act of July 1, 2010 opened the choice of a third party insurer. The Hamon Act of 2014 allowed substitution within twelve months, and the Bourquin Act of 2017 annual cancellation. The Lemoine Act of February 28, 2022 allowed cancellation at any time, for new contracts from June 1, 2022 and for all contracts in force from September 1, 2022. The country's financial sector advisory committee has long reported a claims to premium ratio around 30%, far below other lines.
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