Bancassurance

On February 28, 2022, France's Lemoine law let borrowers cancel the cover attached to a mortgage at any time. Twelve years of legislation led to it, from the Lagarde law of 2010 through the Hamon law of 2014 to the Bourquin amendment, all aimed first at bancassurance, meaning the distribution of insurance through a bank network, usually on behalf of the group's own insurance subsidiary. The model starts from a simple observation. The bank network sees the life events that trigger an insurance need, a mortgage, savings, an inheritance, a business start, and it holds a relationship of trust and financial data no other distributor has. Depending on the group, the insurer is a wholly owned subsidiary, a joint venture or a partner tied by a plain distribution agreement; the bank itself always acts as a registered insurance intermediary and falls under the Insurance Distribution Directive (IDD, 2016/97). German speakers call the same combination Allfinanz. The model took hold first in life savings, close to a bank product, then in creditor insurance attached to loans, and last in personal lines, where it moves more slowly because claims handling remains a trade foreign to banking. Low acquisition cost, many products per customer. The first downside is concentrated conduct risk: a defective sales practice reaches millions of customers at once, and the UK paid for it with PPI, whose complaints deadline fell on August 29, 2019. It continues with tied selling, which French lawmakers took apart piece by piece, and with products whose advice demands a technical depth a bank adviser does not have.