what a fuss for 7 billions euros topics-warsaw april 2018.pdf · what a fuss for 7 billions euros...
TRANSCRIPT
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WHAT A FUSS FOR 7 BILLIONS EUROS !!!
or
THE GREAT ESCAPE
... of insured borrowers
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a FRENCH EXAMPLE
of the war betweenbancassurance operators
and other insurers
Personal Insurances for borrowers
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GROUP INSURANCE CONTRACT
INSURANCE COMPANY
INSUREDBORROWER
Insurance in case of Death or Disability
BANK = BENEFICIARYIn case of borrower’s
death or disability
LOAN
+
BANK = INTERMEDIARY
(broker)
BANKINSURERS
BANK SAME GROUP
CONSUMER
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INSUREDBORROWER
Insurance in case of Death or Disability
BANK = BENEFICIARYIn case of borrower’s
death or disability
LOAN
+
BANK
CONSUMER
INSURANCE COMPANY
OTHER INSURERS
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Personal Insurances for borrowersin France
PREMIUMS 2017*
7 billions €
PROFITS 2017*
3,5 billions €*To be compared to :
- French Social Security : loss 2017 : 4 billions €
*To be compared to :- Personal Income Tax : 70 billions €
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Actual situation
• To obtain the loan, the borrower accepts the Group Insurance contract proposed by the bank...
• and the whole operation (loan + insurance) is managed by the Bank-Insurance Entity
• Profits... : Bank-Insurance Entity
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Problem
• After 6 monthes, 2 years, 5 years, the borrower can think of another insurance contract... less expensive or with a better coverage
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General provision of the Insurance Code* – Article L.113-2
The insured, and the insurer as well, is entitled to terminate the insurance contract every year
* Life insurance excluded
New special provision of the Insurance Code – Art. L113-12-2 Act 17 March 2014Insurances for borrowers (real estate)
The insured borrower is allowed to terminate the insurance contract at any moment during the first year.He has to propose to the bank another insurance contract, with same level coverage
How to escape ?
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Question
Termination decided by the insured
• only during the first year ?
• or every year, during the entire lending period ?
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BANKINSURERS : YES !
OTHER INSURERS : YES !!!
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Specialia generalibus derogant ?
Specialia : art.L.113-12-2(only for borrowers : at any moment during the
first year)
Generalibus : art. L.113-2 (every year)
Legal Problem
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Cour de cassation (French Supreme Court) YES ! Specialia generalibus derogant
Only way to terminate :
at any moment during the first year, NOT AFTER
BANKINSURERS
OTHER INSURERS
Solution ? Episode #1 - 2016
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New Law 21 February 2017 : Both terminations allowed
Art. L.113-12-2 during the first year : at any moment
+ Art. L.113-2
after the first year : every year
BANKINSURERS
OTHER INSURERS
Solution ? Episode #2
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French Constitutional Court
1) Is the new Law (2017) against the French Constitution ?
NO
BANKINSURERS
OTHER INSURERS
Solution ? Episode #3
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French Constitutional Court2) Is the new Law (2017) applicable to on going contracts ?
YES
BANKINSURERS
OTHER INSURERS
Solution ? Episode #3
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New Law (1 April 2018) applicable to on going contracts (1 January 2018) ?
YES
BANKINSURERS
OTHER INSURERS
Solution ? Episode #4
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CAST (in order of apparence)
SPÉCIAL THANKS TO FRANZ XAVER MESSERCHMIDT