SILVER ECONOMY AND INSURANCE

“In France, people aged 60 or over are now 15 million. In 2030, they will be 20 million. This is how the page dedicated to the Silver Economy of the solidarity website of the French Ministry of Health begins. This figure shows the magnitude of the challenge facing our society: between the aging of the “baby boomers” and the increase in life expectancy, the proportion of people over 60 in the French population is increasing. This increase does not happen without asking certain questions such as: how to ensure aging well? Support dependency?

However, this increase is not just a risk factor. Indeed, the over 60s also represent a very interesting new segment of the population for many companies. Thus, it is considered that the over 50s represent 52% of consumption in France while representing only a third of our population. From this observation has developed a whole economy, dedicated to the needs, relational expectations, or project of these seniors: it is the Silver Economy.
Insurers are highly expected on this double equation. Indeed, because of their ability to capitalize, support through provident insurance and finance, they are among the first players mobilized on this subject. However, the answer does not seem to be found yet, as evidenced by the relatively low subscription to new products by these senior populations.

LOAN INSURANCE AND UNBINDING: CCSF BEST PRACTICES

The principle of unbinding between the mortgage loan and borrower insurance, introduced in July 2010, was changed in March 2017 to give the borrower the right to change his insurance annually throughout the life of the contract.

What does the law on borrower insurance say?

This law allows a borrower to take out mortgage loan insurance with an institution other than his bank, provided that this contract presents guarantees equivalent to those offered by the bank. The borrower can thus compete for lower rates. Previously limited to the first twelve months of signing the credit, the change can now be made throughout the life of the contract, under Law No. 2017-203 of February 21, 2017. In its notice published on April 18, 2017, the Financial Sector Advisory Committee (CCSF) reviews the equivalence of the level of guarantee between contracts.

A mixed record

While showing a clear improvement in guarantees as well as a notable drop in borrower insurance prices, the first year of application of the methods defined by the CCSF to assess equivalence highlights some difficulties. Among these, insufficient exchanges between banks and external insurers, a lack of understanding of the equivalence rules and difficulties in their application, insufficient justification for certain refusal decisions, staff training to be improved.

However, it was not considered necessary to revise the methods for assessing guarantees and the elements of the system to circumvent the constraints encountered. Indeed, the CCSF felt that increased efforts on the part of the various actors would improve the situation.

Compendium of good practices

The CCSF has therefore listed some rules to improve the practices of banks and insurers and to strengthen transparency.

In terms of training, the Committee recalls "the importance of training adapted, both in its format and duration, to the specificities of borrower insurance for all the personnel concerned". Besides, the Committee insists on respecting the legal deadline of 10 working days during which the lender must communicate to the borrower the acceptance or rejection of the insurance chosen by the latter. Finally, following the Notice published in January 2015, the lender must systematically and as soon as possible send the borrower a personalized sheet detailing the list of criteria making it possible to assess the borrower's profile.

New assessment at the start of 2021

The Committee will launch a new assessment at the beginning of 2021, by sending a questionnaire to the parties concerned. The objective will thus be to ensure proper monitoring of the implementation of the CCSF's Opinions on equivalence by banking and insurance professionals. Finally, the Committee wishes to develop an indicator to monitor price differences by profile.