On Dec. 13, FR CB announced family assistance clause for loan cover.
FR CB announced imposition of new family assistance guarantee in loan insurance.
Background
In Apr. 2023, 185 members of the French parliament and 85 associations called on insurers to ensure that loan insurance covers families who must reduce or cease working to care for a seriously ill child, or one who has suffered serious accident.
Though possible to benefit from certain public benefits in this situation, these are not enough to cover day-to-day expenses of families, particularly those of modest means.
Situation is even more difficult when these families faced with mortgage repayments.
While loan insurance can compensate insured in event of accident or illness, does not cover repayment of monthly instalments in event of serious illness of borrower's child.
Members of parliament, associations called on insurers to systematically include family assistance in their policies, to cover and protect parents in situations of this kind.
Insurers undertake to include family assistance guarantee in at least one of their loan insurance contracts, to provide for temporary assumption of mortgage repayments.
To finance purchase of a principal residence, in the case of a policyholder who is obliged to cease working partially or totally to assist minor child with serious condition.
Within the limits and definitions set out in contract, this family assistance benefit provided by insurer may be subject to the purchase of temporary disability coverage.
Effectiveness
Family assistance benefit must be introduced by Jul. 2025 at the latest in at least one of the loan insurance contracts distributed by each insurer from that date.
The CSSF will make an assessment of implementation one year later, i.e. Jul. 2026.
