The Financial Sector Advisory Committee (CCSF) on Monday gave a very positive assessment of the Lemoine law, which comes into force in mid-2022 and allows real estate borrowers to change insurance free of charge and at any time.
Supported by MP Patricia Lemoine (Agir), this law strengthened 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 high as they received in 2021, mainly coming from wealthy profiles.
The banking profession shares the analysis that the framework allows borrowers to take full advantage of competition, responded the French Banking Federation (FBF).
No upheaval in the stock of contracts
But in stock, the contracts distributed by banks have only fallen very slightly: their market share went 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 instead lowered their ratesbut that too long deadlines remain in the processing of files.
The effects of the Lemoine law are positive but could be much better to the extent that we continue to observe certain banking practices which slow down consumer mobility, reacted the general director of Ama (which owns Macif) Adrien Couret, in a statement transmitted by AFP.
The removal of the little-used medical questionnaire
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.
Price discrimination practices between contracts with and without medical selection, to the detriment of the latter
The study highlights (…) practices of price discrimination between contracts with and without medical selection, to the detriment of the latter, noted Crdit Mutuel Alliance fédérale, 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 its very low loss ratio, is very profitable for the banks.
Change of presidency at the CCSF
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 is calling for Catherine Julien-Hiebel, current magistrate at the Court of Auditors, to replace her. Corinne Dromer has held several positions during her career in ministerial offices, at the Financial Markets Council, Agence France-Trésor and 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.
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