The anniversary date for the cancellation of the loan insurance is finally clarified.
The Financial Services Advisory Committeehas finally decided. All banks will now have to apply the same rule to determine the anniversary date of loan insurance contracts. The clarification of this date was essential since it determines the annual expiry date of the borrower insurance contracts. This decision will further facilitate the change of borrower insurance. A little reminder of the problem:
What is borrower insurance?
Real estate loan insurance intervenes in the event of health problems or incapacity for work and pays the monthly installment of the loan in place of the borrower in a situation of loss of income.
Lending organizations are thus guaranteed the payment of repayment terms in case of illness or death of their borrower. For their part, borrowers secure their “roof” in case of a hard blow. This is the reason why banks require this insurance most of the time to grant their financing.
It is not the existence of this type of insurance that posed a problem for consumers, but the constrained link between the loan and the bank’s insurance. Generally, the bank imposes an insurance of which it fixes the price without competition and before the recent evolutions of the law, it was no longer possible to change before the end of the loan.
The various laws related to the change of insurance
The insurance imposed by the banks is for her an enormous source of income. The establishment of free choice of loan insurance has therefore not been easy. Banks have resisted and still resist this right.
The first essential law is the Lagarde law on borrower insurance. Entered into force in 2010, it made possible the delegation of insurance. This is the possibility for any borrower to choose insurance in another institution than the bank lending the money.
Then, the Hamon law on borrower insurance of 2014 was an important step forward in this area. This law opens the right to change credit insurance at any time within 12 months of signing the mortgage offer. In order to maintain the essential guarantees to cover the loan, the new insurance must have characteristics similar to those of the insurance to which it replaces. In other words, the guarantees of the new loan insurance contract must be equivalent to the insurance in place for the termination to be possible.
Finally, the law Bourquin or law Sapin 2 came into force in 2018. Thanks to it, it is since possible to change mortgage insurance every year. However, the insurer must be informed by mail 2 months before the due date. For this, it is necessary to send a letter of termination of insurance of real estate loan with acknowledgment of receipt where will be of course presented a contract respecting the equivalence of guarantees that the bank can control.
The heart of the matter is that each bank could declare itself what the anniversary date was. As the only obligation, he had to indicate this mention somewhere.
Thus, it was not easy for consumers to know what this date was, especially since a simple mention at the bottom of the page of a website was enough to fulfill the obligations of the bank. In fact, this difficulty of access to information often allowed the bank to refuse the termination on the pretext of non-compliance with the notice in relation to a date it determined itself.
Communiqué of the Financial Services Advisory Committee
As early as June 28, 2018, at Forte Donage we called to challenge the decision of the Federation of Banks to let each institution set the due date itself.
Fortunately, we were heard and the decision of the CCSF solved this question which was a real trap. It was through a press release on November 27, 2018, that the Committee presented these measures.
A single date of expiry of the contracts is therefore put in place. It therefore applies to all banking institutions. This unique date, adopted unanimously, is fixed on the anniversary of the signature of the loan offer.
In addition, this unique date applies to all current and future contracts. Everyone will benefit.
This decision greatly simplifies the issue of termination as all stakeholders are now talking about the same date. Thus, exchanges between customers and banks become clearer and everyone knows what he is doing.
So it’s a decision that’s good for everyone. Especially since banks will have until the second half of 2019 to adapt to this new provision.
Forte Donage accompanies you in your loan insurance change
This clarification of the due date is a victory for the insured. Nevertheless, it is not always easy to know how to change borrower insurance.
The need for equivalent guarantees for example is not easy to apprehend for an unsuspecting consumer. To know more about these, you can consult our information page.
Forte Donage can help you. We are campaigning for everyone to have the insurance that suits them best. We determine for you the guarantees expected by your bank, we develop the offer meeting its criteria of equivalence, we even strengthen these guarantees when these guarantees appear insufficient. In an instant, your new contract is ready and you can benefit from a price 2 times cheaper. You sign online without waiting for validation and without medical formalities. And now, it’s up to us to play. Forte Donage performed for you free of charge all the formalities of termination and change with your bank.
Concretely, it is 400 to 600 euros per year that you can recover. It’s a huge gain in purchasing power! Forte Donage takes care of all the formalities for free, just let yourself be guided to find out more.