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France: Termination of non-professional insurance contracts – Insured's rights

09 June 2014
The Consumer Law 2014-344 published on 18 March 2014 (the "Law") substantially amends the regulations applicable to the termination of non-professional insurance contracts, with the aim of increasing consumer protection.

The Law grants the insured to right to terminate the contract when he already holds insurance coverage for similar risks (Article L. 112-10 in the French Insurance Code) and allows the insured who subscribed for non-professional use an insurance contract constituting a complement to a good or service sold by a supplier, to withdraw from the contract without fees nor penalties (Article L. 113-15-2). The Law also grants the insured the right to terminate, without fees nor penalties, insurance contract, at the expiry of a one year (1) period from the first subscription or adhesions to such tacitly renewable contracts subject to the insurance covering individuals outside their professional activities and relating to classes of insurance to be determined by a decree. The decree has not been adopted yet. The Law also establishes in Article L. 113-12-2 of the French Insurance Code a twelve (12) months period as from the signing of the loan offer for the insured to terminate the credit insurance contract.

The Law also amends the modalities of termination of insurance contracts at the initiative of insurers by imposing on the latter an obligation to justify their decision in the event of unilateral termination in accordance with the terms of the insurance contract when the insurance contract covers an individual outside his professional activities (Article L. 113-12-1 of the French Insurance Code).

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