Insurers will have to comply with the new rules from 1 July 2023.
Finishing and simplicity never went hand in hand. Notified by the insurance ombudsman of the confusion and misunderstanding in a number of contract termination procedures, the Financial Sector Advisory Committee (CCSF) addressed the issue by setting up a working group specifically dedicated to this issue. After five meetings between November 2021 and April 2022, the various members of the committee, consisting of bankers, insurers, but also consumers and craftsmen, reached an agreement to harmonize the procedures for terminating the contract. The latter will apply from 1 July 2023 and is, according to the CPSU, “very significant progress for consumers“.
Cancel at any time after one year
The various sequences of consultations mainly allowed the committee to agree on the reform of the conditions for the termination of insurance contracts, for which the general review was adopted unanimously. The committee proposed itAll individual insurance contracts covered by insured natural persons outside of their professional activities may be canceled at any time after the first year of subscription.», Based on freezing in the first year. This legislation already applies to multi-risk home insurance, car or health insurance contracts and the committee has therefore decided to extend it to other types of contracts.
Therefore, insurers should try to apply this new termination method with effect from 1 July 2023. It should also be noted that certain types of special contracts are not subject to this harmonization: insurance policies (disability / incapacity) / death) and addiction, seasonal contracts (school contracts, hunting contracts), as well as contracts covering sailing and motor and non-personal transport vehicles.
Simplification of procedures and protection of the insured
The CCSF bodies also acted on the information obligations imposed by the Chatel Act. Since 2005, this has required insurers to notify their clients in writing of the impending renewal of their contract so that they can choose to renew or terminate it. This obligation is subject to certain confusing deadlines, which is why the committee agreed to abolish these information obligations for all contracts that can be canceled at any time after the first year of assistance, in order to “simplification of legislation and therefore the information to be provided to policyholdersFrom now on, the insurer will simply have to inform its client each year of the annual premium amount and remind him that his contract can be terminated at any time.
Finally, the committee chose to point out the specific difficulties associated with kinship insurance contracts, ie the extensions of the warranties generally covered by the products in the event of a breakdown or failure. In this case, the fact that some contracts can be concluded without the insured being sufficiently informed, which can lead to accidents, as happened with the insurance company Indexia.
Under the Hamon Act issued in 2014, the insured had up to 14 days to exercise his right to withdraw from the contract from the date of subscription. The committee unanimously decided to extend this period to 30 days and to “work to strengthen counterparties’ information on these contracts by autumn 2022The CCSF has also chosen to lift the clause restricting the waiver of the possession of equivalent insurance. In fact, the insured will have 30 days to withdraw from his contract without risking subscribing to insurance without his knowledge.