Lemoine Law: Including Borrowers or Facing Ignition Failures?

Entry into force on 1is June 2022, the Lemoine law gave a lot of hope to loan applicants who were discriminated against because patients or former patients. The new regulations extend the right to be forgotten et delete the health questionnaire under certain conditions, but feedback from the field shows ignition failures. Here are the edifying results of the survey conducted by the magazine 60 Millions de consommateurs.

Lemoine law: inclusive measures for borrowers

Before addressing the difficulties encountered by certain borrowers to benefit from the Lemoine lawlet us recall the two key measures it contains:

• The reduction in the time of right to be forgotten : people cured of a cancer do not have to declare their former illness in the mortgage insurance health questionnaire, after a period of 5 years instead of 10 previously. This right has been extended toviral hepatitis C.
• The end of medical selection : for the insured parts of less than €200,000 reimbursed before the age of 60 of the borrower, the health questionnaire is deleted. The insurer no longer has the right to seek any data relating to the client’s health.

The third and not least measure is the possibility of change mortgage insurance at any time, it was even theprimary intention of the Lemoine law. Since 1is September 2022, any borrower can terminate their mortgage credit insurance whenever they wish, the day after signing the loan offer, to replace it with a cheaper offer with equivalent guarantees.

Removal of the health questionnaire: the law misinterpreted

The magazine 60 Millions de consommateurs collected testimonials from borrowers who consider themselves legitimate beneficiaries of the Lemoine law, but victims of obstacles to its application.

According to the Séropotes association, some brokers are misinformed, indicating to their customers that they must wait for the implementing decree. The Lemoine law was promulgated on February 28, 2022 and entered into force on 1is June 2022, no decree is expected.

Age limit at the end of the loan

Problem also on the end date of the loan. The RoseUp association, which supports cancer patientsand in particular women victims of breast cancer, indicates that a person was refused insurance without a health questionnaire on the pretext that if he asked for the suspension of monthly payments of the loan, the age limit of 60 would be exceeded. The law is clear: the due date for repayment of the contracted loan is prior to the sixtieth birthday of the insured “. It is the end of loan date set at the signing of the offer that is authentic.

Maximum amount

To access thehome loan insurance without a health questionnaire, The insured portion of the cumulative outstanding credit contracts does not exceed €200,000 per insured “. Article 10 of the Lemoine law may be subject to extrapolation, as it lacks clarity. There nature of outstandings is not defined : does it include consumer loans? Some insurers include this type of credit in the accumulated outstanding, which can exceed the €200,000 ceiling and prevent the person from accessing insurance without a health questionnaire. However, Article 10 refers to thearticle L.313-1 of the consumer code concerning credit agreements intended for the ffinancing of buildings for residential use or mixed use (residential and professional).

quota

Banks and insurers can also play on the loan insurance quotabe there share ensured by each in the event of a joint loan. Access to insurance without a health questionnaire is possible if the portion insured per borrower does not exceed €200,000 ; in theory, a couple who borrows 400 000€ (with a term before their 60th birthday) may escape medical selection if the quota is 50% on each head.

Unfortunately, the bank is sovereign in terms of guarantees and quota, and can thus impose a quota beyond 100% of the sum borrowed, which obliges the candidates to have to fill in the famous discriminating questionnaire.

Higher rates without a health questionnaire

Another denounced side effect, the fact of proposing a insurance with health questionnaire to benefit from more advantageous rates, while the person is eligible for the device which makes it possible to avoid medical selection. The insurer can thus detect a person with health risks and then present an increased estimate, but without medical selection. The health questionnaire optional is by no means an option; as soon as the borrower respects the conditions, he immediately accesses the insurance without a health questionnaire.

One thing is certain, home loan insurance contracts without a health questionnaire are more expensive than the others because of the pooling of risks. This is more true with alternative insurers who have less information about their customers than banks. The latter have indeed a snitch, the bank account, which reveals the daily allowances of the Health Insurance in the event ofwork stopping. To prevent a high loss rate, competing insurers are increasing their rates on average 20%. Young and healthy borrowers have every interest in increase the insurable portion to benefit from adjusted rates.

Beware of warranty exclusions

While bank insurers have chosen not to change their rates with the entry into the running of the Lemoine law, some are skimping on guarantees by excluding maladies non objectivables (MNO), like La Banque Postale-CNP, which boasted of freezing its rates but which excludes back pathologies (herniated disc, low back pain, neck pain, sciatica, etc.). In the event of work stoppage linked to a pre-existing condition at the time of signature, the borrower is not covered.

For Arnaud Chneiweiss, insurance mediator, there is nothing illegal, ” the insurer is free to impose exclusions of guarantees “. For the French federation of diabetics, this practice ” empties the law of its substance “. Note, however, that most contracts exclude MNOs (dorsovertebral affections, psychological and psychiatric pathologies), but that thebuy-out exclusion option is often offered with an additional borrower insurance premium.

The Deputy Patricia Lemoineat the initiative of the law that bears his name, expected possible side effects, and the facts back him up. The Senate introduced the deletion of the health questionnaire without an impact study. The law had to be validated before the end of the previous legislature.

If only sick or formerly sick people access insurance without a health questionnaire, the principle of pooling loses its interest, and price drifts are to be feared. However, one of the objectives of the law was to make themore inclusive borrower insurance. An assessment of the application of the Lemoine law by the Financial Sector Advisory Committee is expected for 2024; she will say if corrections are necessary. Some patient associations are already calling for a redesign of the device since the spirit of the law has been perverted according to them.