“Very positive” assessment of the Lemoine law on borrower insurance, according to the CCSF

Supported by MP Patricia Lemoine (Agir), this law has “reinforced competition” in the borrower insurance market, writes the CCSF in a report addressed to Parliament.

The banking networks, dominant in this segment, received in the second half of 2022 and the first half of 2023 a number of requests to change insurance twice as many as those received in 2021, mainly coming from wealthy profiles.

But in stock, the contracts distributed by banks have decreased very little: their market share increased from 80,3% at the end of 2021 to 79,6% at the end of May 2023.

The CCSF also notes that banks, historically more expensive than their competitors, have rather lowered their prices, but that excessively long delays remain in processing files.

“The banking profession shares the analysis that the framework allows borrowers to take full advantage of competition,” reacted the French Banking Federation (FBF).

The removal of the medical questionnaire for property loans of less than 200.000 euros, the second major part of the Lemoine law, only concerned a minority of borrowers, adds the CCSF.

If 58,5% of credit subscribers were eligible in terms of amount, only 23% did not exceed the age limit of this provision, i.e. 60 years before the end of the credit.

“The study underlines (...) practices of price discrimination between contracts with and contracts without medical selection, to the detriment of the latter”, noted the Crédit Mutuel Federal Alliance, which fears a “two-speed market” .

Borrower insurance covers various risks such as death, illness or disability. It protects both borrowers and banks against possible repayment default.

This product, with very low claims, is very profitable for the banks.

The CCSF will also change directors in the first quarter. Corinne Dromer, 64, confirmed to AFP her departure from the institution at the end of her mandate and a handover period with her successor.

L'Argus de l'assurance mentions Catherine Julien-Hiebel, current magistrate at the Court of Auditors, as her replacement.

Corinne Dromer has held several positions during her career in ministerial cabinets, at the Financial Markets Council, at Agence France-Trésor and at the Banque de France.

She took over, in January 2017, from Emmanuel Constans, who exercised his retirement rights after having led the CCSF since its creation in 2004.

Illustrative image of the article via Depositphotos.com.