Lemoine law (French borrower insurance reform)
A 2022 law allowing borrowers to switch borrower insurance at any time, removing the health questionnaire for modest home loans and shortening the right to be forgotten, sharply reducing medical selection.
The February 28, 2022 law for fairer, simpler and more transparent access to the borrower insurance market, known as the Lemoine law, transformed the insurance that guarantees repayment of a home loan in case of death or disability. It has three main measures. Termination at any time: the borrower may switch insurance whenever it wishes, since June 2022 for new loans and September 2022 for existing ones, provided the new contract offers equivalent cover. Removal of the health questionnaire for loans whose insured share does not exceed 200,000 euros per person and which end before the borrower turns sixty. And shortening of the right to be forgotten to five years after the end of treatment for cancers and hepatitis C. For insurers, the law reduces medical selection across a large part of the market, shifting pricing toward pooling and increasing adverse selection risk, and it opens to competition a market long dominated by lending banks' group contracts, whose margins were high.
Hypothetical case, under the law of 28 February 2022, whose removal of the health questionnaire has applied since 1 June 2022: a couple borrows 300,000 euros over twenty years, each insured at 50 percent, or 150,000 euros per person, and the loan ends before they turn sixty. No health questionnaire may be required of them, and they can switch insurers the following year if they find a cheaper equivalent contract.
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