Medical underwriting

Before accepting an applicant, an insurer appraises their risk, and the formalities rise with the amount and with age, from a simple declaration up to laboratory tests and, above certain thresholds, an exercise stress test. Five possible outcomes. Standard rates, an extra premium, exclusion of a named condition, postponement while the medical situation stabilizes, decline. The technical justification is adverse selection; without underwriting, those who know they are ill would insure more often and for larger amounts, and the average rate would gradually drive good risks away. The limit is political. No one chooses their genes or their medical history, and the French legislature has steadily narrowed what an insurer may ask. Where to draw the line is a social judgment more than an actuarial one. France's Lemoine Act of February 28, 2022 shows how far this goes. Since June 1, 2022, no medical formality may be required for a home loan where the insured share does not exceed 200,000 euros per borrower and repayment ends before the borrower's sixtieth birthday. A large part of borrower insurance has thus left medical underwriting.