Credit insurance reform

Recently, Christine Lagarde, Minister of Economy Industry and Employment presented a reform plan to fundamentally change the current legislative provisions that allow banks to require borrowers in their insurance a mortgage application.

Remember that this insurance is to cover the borrower in case of death, disability and disability and sometimes loss of employment.

This reform will thus enable, by 2010, to all borrowers to choose their insurance loan only if the proposed contract includes guarantees equivalent to those offered him the bank.

For information, 85% of borrowers currently subscribe to their contract with the lender.
Another very important part of the reform: increasing transparency. The consumer who wishes to purchase a credit insurance policy will now provide a form of advice and information.

The government has prepared this document in consultation with the insurance professionals and in partnership with consumer groups. And for the first time, consumers have been involved in constitution of panels that have tested and significantly improve the document.

The form of advice and information is a unique environment that will prevail at all and should be completed jointly by the borrower and the dealer (banker, insurer, broker ...). It will allow the consumer to be better informed of their rights and duties, which, it must be admitted, was lacking until now.

Finally, consumer credit will show the price of credit insurance. This should be expressed in euros per month.

Remember that the credit insurance market is a very active market with over 4 million contracts sold in the year 2007 (mortgages and professional) for a turnover of over 6 billion and a half euros. Today over 30% of households who own an insurance borrower is more than eight million.