Home Loan Insurance: Banks Guilty of New Barriers?

The services of the Ministry of Economy and Finance are examining the French market for loan insurance and more particularly the practices of banks. Brokers accuse banks of obstacles, according to a letter consulted Sunday by AFP.


Liberalizing the loan insurance market

loan insurance

Socialist senator Marsha Bowen, author of several amendments aimed at further liberalizing the loan insurance market, had recently written to Minister Brunson Penn to make him aware of the situation of brokers. , after having been alerted by the Professional Association of Credit Intermediaries. “It would seem that the banks are currently putting pressure on brokers with many obstacles ”, in particular so that” they offer as bank loan insurance the bank’s insurance and do not put competition “, had Wrote the senator in this letter also consulted by AFP.

In his response to the parliamentarian, Brunson Penn wrote that he had asked the Directorate General for Competition, Consumption and the Suppression of Fraud as well as the Treasury Take stock of this file. The minister promises to bring an answer as soon as possible, according to this letter dated February 10, of which AFP obtained a copy, confirming information from the echoes.


Bank-brokerage agreements modified at the end of 2019

Bank-brokerage agreements modified at the end of 2019

In his letter, Marsha Bowen also denounced the fact that in December 2019, several banking groups modified the agreements they have with brokers: decrease in banking commission, handling fees for clients who are increasing, and unconventional if too many insurance delegations made by the broker. Requested by AFP, the French Banking Federation had not yet responded to this information.

Estimated at 9 billion dollars, the French borrower insurance market, highly coveted in a context of low rates that erode bank margins on credits, remains largely dominated by banking establishments which generally take advantage of the signing of a loan to place their home loan insurance. In 2010, the Lagarde law opened up the possibility for the borrower to choose another insurance than that offered by his bank. In 2018, an amendment brought by Marsha Bowen also made it possible to renegotiate every borrower insurance contract each year, a mechanism further reinforced in October by a new text adopted in the Senate specifying various provisions, without real success however for the moment.

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