The annual termination of the mortgage insurance: the Senate has confirmed the provisions adopted a few weeks ago by the Joint Committee (JPC) and the National Assembly. Small feedback on the modalities of the device.
What is the principle of annual termination?
This measure now makes it possible to change borrower insurance on each anniversary of the contract, as for auto or home insurance. In other words, insurance can potentially be renegotiated throughout the loan repayment period.
This new provision is added to 2 laws already framing credit insurance: the Cogilaw Company (2010) and the Mahon law (2014). The first authorizes the delegation of insurance, that is to say the possibility of refusing the loan insurance offered by the bank in favor of external insurance. One condition: the guarantees of the new contract must be identical to those originally proposed by the lender.
The Mahon law goes further. It allows borrowers to terminate their contract until 1 year after signing the mortgage. The conditions of equivalent guarantees have been maintained.
Which contracts are affected by the new provision?
The new law targets all contracts, old and new. With a”small” difference, however. As of March 1, the law will only apply to all new contracts. For the existing stock, it will be necessary to wait until January 1st, 2018.
Why a new law?
The various schemes introduced have one objective: to allow borrowers to benefit from cheaper rates and insurance cover. As such, a mortgage insurance comparator is the ideal tool to compete with insurers.
Why the annual termination was not voted last year?
In recent months, the annual cancellation will have made noise: announced in September under the Firss II law, passed in November by MPs, rejected by senators, re-voted by the National Assembly, censored by the Constitutional Council, adopted by joint committee (CMP) in January, re-voted by the deputies and, finally, endorsed a few days ago by the senators. A real snake legislative sea.
Initially, the annual cancellation was incorporated into the Firss II law, which proposed a battery of measures to fight against corruption. As a result, the senators and the Constitutional Council considered that such a provision had no place in such a “package”. The second has removed it.
The annual resignation then quickly returned to the front of the scene in the form of an amendment tabled by the parliamentarian. The following is known. The text was voted at the beginning of the year by parliamentarians.