The Lemoine Law, which went into effect on June 1, 2022 in France, marks an important turning point for all insurers, bankers and brokers. With the inevitable intensifying of competition, it’s now necessary to find new differentiators while continuing to limit risk. Here, we explain why Budget Insight’s Open Finance technologies can help you through this revolution in the loan insurance market.
Major changes to loan insurance
Until now, loan insurance could be changed during the first year of signing the loan offer, and then every year on the contract’s maturity date. From June 1, 2022, subscribers to any new mortgage loan can cancel their contract at any time and without charge to accept a more competitive offer. From September 1, the same rule will apply to all other contracts.
Two other major changes are brought by the reform. First, it marks the end of the medical questionnaire for loans of less than €200,000 (or €400,000 for a couple) for individuals who will be under 60 years of age at the end of their loan. It also adds the right to forget within five years after recovery for people who have suffered from cancer or hepatitis C.
These changes, which aim to improve borrowing conditions and liberalize the loan insurance market, reshuffle the cards for all lending institutions and brokers in France.
What can you do with our Open Finance technology?
Open Finance, which is growing rapidly across Europe, aims to offer ever more relevant services and products that benefit market players and improve the customer experience. Our technologies offer real opportunities and enable the emergence of new uses in banking, insurance and many other fields.
What about loan insurance? As a lender with our API, you can automatically collect bank account data and outstanding loans from policyholders who approach you.
The advantages are considerable. The process is considerably simplified for subscribers who opt for the bank connection instead of filling out a tedious form. Subscription to your product is thus accelerated and onboarding is facilitated.
Thanks to key data (outstanding capital, interest rate, subscription date, or even details of the next due date), quote calculations are not only simplified but also more secure because they’re based on information retrieved directly at the source. This means no more declarations and no more risk of fraud.
Another key piece of data is the insurance premium. Our technical teams are currently working on the transmission of this information to calculate possible gains for the insurer by changing establishments.
To offer the best rate to a new borrower while strongly limiting risk, we also enable you to analyze their behavior. We have a partnership that allows us to offer an advanced categorization of banking transactions. Here again, the customer journey is facilitated, and your analysis is much more precise because it’s based on factual data and not declarations.