In Summary
| Section | Description |
|---|---|
| 📜 Introduction | The Bourquin Law, an amendment to the Sapin 2 Law introduced in 2017, allows for greater flexibility in managing borrower insurance with an annual review of contracts. |
| 🔍 Principle of the Law | Extends the possibilities offered by the Hamon Law of 2014, allowing borrowers to change their borrower insurance annually on the contract’s anniversary date. |
| 🛡️ Guarantee Conditions | New insurances must offer guarantees at least equivalent to the previous ones to protect borrowers against risks such as death, disability, etc. |
| 📅 Termination Mechanism | The borrower must notify their intention to change insurance two months before the loan’s anniversary, accompanied by an equivalence certificate of guarantees. |
| 💸 Economic Benefits | The law allows for potentially significant savings by putting insurers in competition and adjusting coverage according to personal needs. |
| 🏠 Eligibility and Impact | Accessible to all individuals who have taken out a mortgage, affecting millions of French people who can optimize their budget by comparing offers annually. |
| 🔧 Flexibility and Adaptability | Allows borrowers to personalize their insurance based on the evolution of their personal situation. |
| 📝 Notification Procedure | Requires formal written notification, often via registered letter, to ensure documentation and traceability of the change request. |
| 🌟 Importance of Choosing the Insurer | Essential to choose an insurer offering competitive rates and reliable guarantees to maximize the benefits of the law. |
The Bourquin Law, officially introduced via the amendment to the Sapin 2 Law in 2017, represents a significant advancement for French borrowers. This regulation allows for increased flexibility in managing borrower insurance, offering the possibility to review contracts annually.
Principle of the Bourquin Law
Context and Evolution of Borrowers’ Rights
The Bourquin Law, officially the Bourquin amendment, is a natural extension of the 2014 Hamon Law. The Hamon Law marked a first step towards flexible borrower insurance by allowing new borrowers to change their loan insurance within the first 12 months after signing their mortgage. However, this limited window left little room for continuous reevaluation amid the evolving insurance market.
Extension of Annual Termination Rights
The Bourquin Law addresses this limitation by giving borrowers the right to change their borrower insurance each year. This annual termination right applies on the contract’s anniversary date, enabling a periodic and systematic reassessment of insurance conditions based on changes in the borrower’s personal circumstances or more advantageous competing offers.
Guarantee Conditions of Equivalence
A key aspect of the Bourquin Law is the requirement that the guarantees of the new insurance contract be at least equivalent to those of the current contract. This condition ensures that the borrower remains adequately covered against risks such as death, disability, incapacity to work, or illness, without reducing the level of protection. To establish this equivalence, borrowers and new insurers must compare covered guarantees, exclusions, waiting periods, and other important contractual factors.
Termination Mechanism and Consumer Impact
To implement this termination, the borrower must notify their current insurer and bank of their intention to change insurers, respecting a two-month notice period before the loan’s anniversary date. This notification must be accompanied by a guarantee equivalence certificate from the new insurer, which may require advice or brokerage services to ensure compliance.
Economic and Personal Benefits
The impact of this law on personal finances can be significant, as it enables borrowers to benefit from more favorable conditions and potential cost reductions from insurer competition. By allowing annual reevaluation, borrowers can adjust their insurance coverage to better suit their changing life situation, such as health changes, profession, or family circumstances, while optimizing associated costs of their mortgage.
Who Can Benefit from the Bourquin Law?
Extended Eligibility to Mortgage Borrowers
The Bourquin Law is accessible to all individuals who have taken out a mortgage loan. This legal provision is designed to encompass a wide range of borrowers, from first-time homebuyers to seasoned investors, and applies to any type of mortgage for the purchase of primary residence, secondary residence, or rental property.
Potential Impact on Millions of French People
In France, access to property is a key step in building wealth for many households. With nearly eight million households having taken out a mortgage in 2017, according to the Credit Observatory, the impact of the Bourquin Law could be substantial. Each borrower with an ongoing loan can, from the year after signing their loan and on each anniversary of this date, reconsider their borrower insurance contract.
Advantages of Annual Optimization of Insurances
This law allows borrowers to compare mortgage insurance offers annually. The main advantage is financial: by putting insurers in competition, borrowers can reduce their insurance costs. This can lead to substantial savings over the entire loan duration, thus improving their budgetary capacity.
Flexibility and Adaptability
Besides financial benefits, the Bourquin Law offers flexibility, allowing borrowers to adapt their insurance to their personal situation, which may evolve over time. For example, improved health, a profession change, or family situation modification can justify adjusting coverage to better match current risks.
Implementation Modalities of the Bourquin Law
Respect for the Termination Notice Period
A fundamental element for benefiting from the Bourquin Law is respecting the two-month notice period. This means that the borrower must inform their current insurer and bank of their intention to change borrower insurance at least two months before the contract’s anniversary date. This prior notification is crucial to allow all concerned parties to prepare and adjust the necessary details before implementing the new insurance contract.
Guarantee Equivalence
For a new insurance contract to be accepted as a replacement, it must offer guarantees at least equivalent to those of the initial contract. This guarantee equivalence ensures that the borrower remains adequately covered against the same risks as before, such as death, disability, incapacity to work, and serious illnesses. The evaluation of equivalence is usually conducted by the bank, which will verify that the new contract meets the initially required minimum criteria.
Notification Procedure
The change notification must be made in writing, often by registered letter with acknowledgment of receipt. This formal process allows for official documentation of the request and ensures a trace for all parties. The borrower must include in their notification the details of the proposed new contract, along with an attestations of guarantee equivalence provided by the new insurer.
Bank Acceptance
Once the notification is received, the bank will review the new contract to ensure it meets all required coverage conditions. If the bank is satisfied with the guarantee comparison, it will approve the change. In case of refusal, it is obliged to justify its decision, giving the borrower the opportunity to understand the reasons for the refusal and take appropriate measures.
Importance of Choosing the Insurer
It is essential for the borrower to choose an insurer that not only offers competitive rates but is also recognized for the quality and reliability of its guarantees. Using online comparison tools or consulting insurance brokers can be effective ways to find the most suitable contract under advantageous conditions.
Advantages of the Bourquin Law
Reduction of Insurance Costs
The main advantage of the Bourquin Law is the ability it gives borrowers to significantly reduce their insurance costs. By allowing borrowers to renegotiate their mortgage insurance annually, the law creates a competitive mechanism where insurers are encouraged to offer more advantageous rates to attract or retain clients. This can lead to significant savings over the total duration of the loan, which can amount to thousands of euros depending on the initial loan amount and term.
Improved Financial Accessibility
The savings achieved through the ability to change borrower insurance annually help households better manage their budgets and allocate their financial resources to other needs or investments. This improvement in financial accessibility can be particularly beneficial for young borrowers and families seeking to maximize their purchasing power while securing their real estate investment.
Customization of Coverage
Another notable advantage of the Bourquin Law is the possibility for borrowers to personalize their insurance coverage according to their evolving personal situation. Whether a change of profession, improved health status, or modification of financial needs, borrowers can adjust their guarantees to better match their current risk profile, ensuring they only pay for what they really need.
Stimulates Competition and Service Quality
Increased competition among insurers not only leads to lower prices. It also motivates insurance companies to improve the quality of their services and innovate in their product offerings. Borrowers thus benefit from more transparent contracts, clearer conditions, and an improved customer experience, as each insurer seeks to differentiate itself from competitors.
Enhanced Consumer Protection
Finally, the Bourquin Law strengthens consumer protection by giving them greater control over their mortgage insurance. It balances the power between borrowers and financial institutions, reducing tied selling practices often encountered in the banking sector where borrowers were sometimes forced to accept the insurance offered by the lending bank without the possibility of comparison.
Comparative Table Before and After the Bourquin Law
| Subscription Year | Resiliation Options Before the Law | Resiliation Options With the Law | Notice Period Required | Potential Savings |
|---|---|---|---|---|
| Before 2017 | Resiliation only in the first year (Hamon Law) | Annual resiliation on each anniversary date | 15 days (Hamon Law) | Limited after 1 year |
| 2018 and after | – | Annual resiliation on each anniversary date | 2 months before the contract anniversary | Potentially high each year |
Example of Using the Bourquin Law
Let’s consider Claire, a young professional who purchased her first apartment in Lyon in January 2018, taking out a €200,000 mortgage over 20 years. At the time of signing her loan, her bank offered her borrower insurance costing €50 per month, totaling €12,000 over the life of the loan.
Initial Situation:
- Loan subscription date: January 2018
- Monthly insurance cost: €50
- Loan duration: 20 years
After a year, in January 2019, Claire discovered that she could potentially save on her insurance thanks to the Bourquin Law, which allows her to review her insurance contract each year on the anniversary date.
Claire’s Action:
- Date: November 2018
- Approach: Claire begins comparing available borrower insurance offers on the market. She finds an offer with equivalent guarantees but costing €35 per month, representing significant savings for the remaining duration of her loan.
Changement Process:
- Notice period: Claire sends a termination notice to her current insurer in November 2018, respecting the two-month notice before the loan’s anniversary.
- Documentation: She provides her bank with an attestations of guarantee equivalence from the new insurer.
- Validation: The bank reviews the offer and confirms that guarantees are equivalent. It approves the insurance change.
Result:
- Cost savings: By switching insurers, Claire reduces her monthly insurance cost by €15. Over the remaining 19 years of her loan, Claire will save approximately €3,420 (€15 saved each month x 228 remaining months).
Transition to the Lemoine Law
Context of Legislative Evolution
Although the Bourquin Amendment was a major step forward in flexible borrower insurance, the Lemoine Law, adopted in 2022, marked a new stage in optimizing borrower rights in France. This law represents a natural evolution towards even greater freedom for consumers in managing their mortgage insurance.
Resiliation at Any Time
The main innovation brought by the Lemoine Law is the possibility for borrowers to cancel their borrower insurance at any time after the first year of subscription, without respecting a notice period. This radical change allows for more rapid reactions to market fluctuations or changes in personal circumstances, which might prompt seeking better conditions or rates.
Maintenance of Guarantees of Equivalence
Like the Bourquin Amendment, the Lemoine Law stipulates that new insurance offers must provide guarantees at least equivalent to those of the current contract. This condition ensures that the borrower’s security is not compromised when changing insurer, maintaining a certain rigor in selecting new offers, and ensuring savings are not achieved at the expense of coverage.
Increased Benefits for Borrowers
This law offers a greater freedom and new savings opportunities for borrowers, enabling them to more actively and frequently benefit from insurer competition. The Lemoine Law can significantly reduce insurance costs for many borrowers, especially those in good health or whose risk profile improves over time.
Market Impacts
The introduction of the Lemoine Law is likely to invigorate the borrower insurance market by encouraging companies to continually improve their offers to attract and retain clients. This could lead to overall improvements in conditions offered, in pricing and coverage, to the benefit of all consumers.
Conclusion
The Bourquin Law was an important step toward greater freedom and savings for borrowers. With the implementation of the Lemoine Law, options for optimizing mortgage insurance are even more accessible, encouraging consumers to actively seek out the best offers available on the market.
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