Changing Borrower Insurance in France: The Lemoine Law Guide

Taking out a mortgage is often the project of a lifetime, but the cost of the accompanying borrower insurance can quickly inflate the overall bill. Long locked down by banking institutions, the loan insurance market underwent a true revolution with the entry into force of the Lemoine Law in 2022. Whether you are a French citizen or a foreign resident living in France, this legal framework offers you unprecedented freedom to renegotiate your contract and save thousands of euros. Discover how to seize this opportunity, understand your rights, and complete your procedures with peace of mind thanks to our comprehensive guide.

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What is the Lemoine Law? The Legal Framework

Promulgated under law n° 2022-270 of 28 February 2022 "aiming to simplify access to borrower insurance", the Lemoine Law has profoundly modified the Code de la consommation (French Consumer Code) and the Code des assurances (French Insurance Code). Its main objective is to boost competition in the loan insurance market and to facilitate access to credit for individuals who have, or have had, health issues.

This law introduces three fundamental pillars that completely change the rules of the game:

1. Cancellation at any time (free of charge)

This is the flagship measure of the law. Previously, borrowers had to respect very strict time windows (the first year under the Hamon Law, then on the anniversary date of the contract under the Bourquin Amendment).

Now, Article *L. 313-30 of the Code de la consommation*** stipulates that the borrower can cancel their insurance contract at any time, without fees or penalties, starting from the day after signing the loan offer. This provision applies to all mortgage contracts intended for the purchase of residential (or mixed-use) property.

2. The ban on health questionnaires under certain conditions

To facilitate access to credit for people who are ill or recovered, the Lemoine Law removes the medical questionnaire, subject to meeting two cumulative conditions (Article *L. 113-12-2 of the Code des assurances***):

• The insured share per person on the cumulative outstanding credit contracts does not exceed €200,000 (meaning a total of €400,000 for a co-borrowing couple insured at 50% each).
• The repayment maturity of the contracted loan occurs before the insured's 60th birthday.

3. Reduction of the "right to be forgotten" timeframe

The droit à l'oubli (right to be forgotten) allows survivors of cancer or hepatitis C to no longer declare their past illness to the insurer. The Lemoine Law reduced this timeframe to 5 years after the end of the therapeutic protocol (with no relapse observed), compared to 10 years previously.

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The Principle of Equivalence of Guarantees: The Key to Switching

For your bank to accept your new external insurance contract (referred to as délégation d'assurance or insurance delegation), the law requires compliance with the principle of equivalence of guarantees.

According to Article *L. 313-30 of the Code de la consommation**, the bank cannot refuse a new contract if it presents a level of guarantee equivalent or superior to the group contract (assurance de groupe*) it offers.

To evaluate this equivalence, banks rely on a list of criteria defined by the Comité Consultatif du Secteur Financier (CCSF - Financial Sector Advisory Committee). The bank must choose a maximum of 11 criteria of guarantees from a closed list for mandatory coverages (Death, Total and Irreversible Loss of Autonomy - PTIA, Total Permanent Disability - IPT, Total Temporary Incapacity - ITT) and 4 criteria for the optional Job Loss coverage. These criteria must appear on the Fiche Standardisée d'Information (FSI - Standardised Information Sheet) provided to you when you applied for your loan.

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Practical Steps: Changing Insurance Step-by-Step

Changing your borrower insurance is a simple procedure, but it requires rigor to avoid any rejection from your bank. Here is the process to follow:

Step 1: Analyse your current contract and obtain your Standardised Information Sheet (FSI)

Retrieve your current insurance contract and request your Fiche Standardisée d'Information (FSI) from your bank. This document precisely lists the minimum guarantees required by your banking institution for your loan.

Step 2: Compare market offers

Shop around by using online comparison tools or by contacting an insurance broker (courtier). Request quotes that scrupulously respect your bank's equivalence criteria.

Step 3: Sign up for the new insurance contract

Once you have found the ideal offer, sign up for it. Please note: the effective date of this new contract must be set taking into account the bank's processing time (allow about 15 to 30 days in the future) to avoid any period without coverage.

Step 4: Send the substitution request to the bank

Send to your bank, by lettre recommandée avec accusé de réception (LRAR - registered letter with acknowledgement of receipt) or via a secure electronic channel:

• The formal request for insurance substitution.
• The signed new insurance contract (both the general and specific terms and conditions).

Step 5: Wait for the bank's response

From the receipt of your complete file, the bank has a legal deadline of 10 business days to notify you of its decision (acceptance or reasoned refusal).

If it accepts, it must issue an amendment (avenant) to your loan agreement free of charge within the same timeframe. If it refuses, it must justify its decision in writing, indicating precisely which equivalence criteria were not met.

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Deadlines, Amounts, and Key Figures to Remember

To ensure a successful transition, keep these essential figures in mind:

• €0: No administrative, cancellation, or amendment fees can be charged to you by the bank for changing insurance (subject to an administrative fine of up to €3,000 for an individual and €15,000 for a legal entity).
• 10 business days: The maximum timeframe the bank has to respond to your substitution request.
• €200,000: The outstanding loan balance threshold per insured individual below which the health questionnaire is eliminated (before your 60th birthday).
• 5 years: The new legal timeframe for the right to be forgotten after the end of cancer or hepatitis C treatments.
• 50% to 70%: The average savings achievable on insurance costs by switching from a bank's group contract to an individual delegated contract.

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Concrete Examples of Savings Achieved

Nothing beats real figures to understand the financial impact of the Lemoine Law.

Example 1: A young first-time buyer couple (with no health issues)

Thomas (30 years old) and Julie (28 years old) borrowed €300,000 over 25 years in 2021 to purchase their primary residence. They are insured at 100% each (maximum coverage).

• Bank's group insurance: Average rate of 0.38% on the initial capital. Total cost of insurance: €57,000 over the duration of the loan (meaning €190 per month for the couple).
• New contract (Lemoine Law): After comparison, they opt for external insurance at a rate of 0.11% on the remaining capital outstanding. Total remaining cost: €18,500.
• Net savings achieved: €38,500 in savings over the remaining duration of the loan, with strictly identical guarantees.

Example 2: A senior borrower with a medical history

Marc (52 years old) borrowed €180,000 alone over 15 years for a buy-to-let investment. Cured of colon cancer for 6 years, he was facing a medical premium surcharge (surprime) of 150% on his initial bank contract.

• Bank's group insurance (with surcharge): €145 per month.
• New contract (Lemoine Law): Marc has an outstanding balance of less than €200,000, but his loan ends before his 67th birthday (whereas the law requires the loan to end before 60 to bypass the medical questionnaire). Since Marc is 52 and the loan lasts 15 years, the loan will end when he is 67. He must therefore fill out a medical questionnaire. However, thanks to the right to be forgotten being reduced to 5 years (he has been cured for 6 years), he is no longer required to declare his past cancer.
• New rate obtained: €42 per month (standard rate without surcharge).
• Net savings achieved: €103 per month, representing €18,540 in savings over the total duration of the loan.

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Mistakes to Avoid When Changing Insurance

• Cancelling the old contract too early: Never cancel your current insurance before receiving written agreement from your bank and the amendment (avenant) to your loan contract. You would risk finding yourself without coverage, which is a ground for the bank to demand immediate repayment of your loan (déchéance du terme).
• Neglecting the equivalence of guarantees: A single missing or inferior criterion in the new contract compared to the bank's requirements justifies a refusal by the bank. Meticulously compare every single line of the FSI.
• Lying on the health questionnaire (if you are subject to it): If you do not meet the exemption criteria for the medical questionnaire (outstanding balance > €200,000 or loan end age > 60), any intentional false declaration can lead to the nullity of the contract (Article *L. 113-8 of the Code des assurances***), leaving you without coverage in the event of a claim.
• Forgetting to check waiting periods and deductibles: Two contracts might display the same guarantees (e.g., Temporary Work Incapacity), but have different deductibles (franchises) (e.g., compensation starting after 90 days of sick leave versus 30 days). Ensure the new contract is at least as protective.

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Frequently Asked Questions (FAQ)

Can the bank increase my mortgage interest rate if I change insurance?

No. Article *L. 313-30 of the Code de la consommation*** formally prohibits the bank from modifying your loan's interest rate, demanding additional fees, or changing the loan approval conditions in exchange for an insurance delegation.

I am a non-resident or a foreigner in France, can I benefit from the Lemoine Law?

Yes, absolutely. The Lemoine Law applies to all mortgage contracts governed by French law, regardless of the borrower's nationality or tax residency. Alternative insurers often offer contracts specifically tailored to expat or non-resident profiles.

What should I do if my bank rejects my new insurance?

If the bank refuses, it must notify you of its refusal in writing with explicit reasons within 10 business days. If you believe this refusal is unjustified (as the guarantees are equivalent), you can contact the bank's mediator or file a complaint with the ACPR (Autorité de Contrôle Prudentiel et de Résolution - the French prudential supervision authority).

Is it possible to change insurance multiple times during my loan?

Yes. The Lemoine Law does not impose any frequency limits. Theoretically, you can change your loan insurance every year if you find a more competitive offer on the market, provided you always respect the equivalence of guarantees.

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Summary

• Cancellation at any time: You can change your mortgage insurance whenever you want, without fees or penalties.
• Equivalence of guarantees: The new contract must feature guarantees at least equal to those of the bank's contract.
• No medical questionnaire: Eliminated for outstanding balances under €200,000 per insured individual ending before your 60th birthday.
• Reduced right to be forgotten: Timeframe reduced to 5 years for former cancer or hepatitis C patients.
• Major savings: Opportunity to reduce your insurance cost by 50% to 70%, often representing thousands of euros in savings.

Legal information for guidance only, not personalised legal advice. For your specific situation, ask your question free of charge on AvocatAI — answers based on French law, in your language.