There are a number of laws regulating insurance policy termination in France. Some insurance policies, such as civil liability, are even mandatory.While it is obviously possible, and even preferable , to use electronic signatures for insurance contracts, what about cancellations? Let’s find out in our article !
Terminating an insurance contract: a process that’s been made much easier
Regardless of the type of insurance (car, motorbike,health, or home insurance, the Chatel and Hamon laws, passed in 2005 and 2014 respectively, have made it much easier to terminate insurance contracts.
The Chatel law was enacted in 2005 and aims to prevent the tacit renewal of an insurance contract. Before this law, insurance contracts were renewed tacitly, i.e. without any mention of the insurer. It was not uncommon for policyholders to be dissatisfied with this renewal when they wanted to cancel an insurance policy, as they had to pay for the remaining months of their contracts.
The Chatel law puts an end to this tacit renewal by requiring the insurer to issue an annual expiry notice, which indicates in black and white the date on which the policyholder may terminate the contract.
Before this law, insurance contracts were renewed tacitly, i.e. without any mention of the insurer. It was not uncommon for policyholders to be dissatisfied with this renewal when they wanted to cancel an insurance policy, as they had to pay for the remaining months of their contracts.
The Hamon law was enacted on 17 March 2014 and came into force on 1 January 2015. It reinforces the Chatel law.
This law gives all citizens holding insurance policies (which are compulsory) the possibility of changing insurers on the date of their choice, once the first anniversary of the contract has passed.
Before this law, policyholders had to wait until the contract expiry date and start the cancellation process two months before the deadline. Today, a letter of cancellation sent to your insurer is enough. There is no need to give any reason.
If you are cancelling your insurer for a new insurer, the new insurer can take care of the procedures themselves. All you have to do is sign up with the new insurer and they will take care of everything.
Of course, there is a fairly large number of insurance policies and the Chatel and Hamon laws, while not covering all of them, do cover a majority. Thus, the Chatel and Hamon laws cover all contracts relating to:
- Home insurance🏠
- Car insurance 🏎
- Motorbike insurance 🏍
- Affinity insurances (extensions of cover subscribed with non-insurance distributors)
Terminating an insurance contract electronically
The Chatel and Hamon laws have greatly changed the balance of power between insurers and policyholders. From now on, a policyholder is no longer necessarily bound to a specific insurer until the end of his or her contract. Customer chasing has therefore intensified among consumers who already have insurance contracts.
At the time of the Hamon law, 32% of French people were thinking of terminating their insurance contracts, according to a study reported by Le Figaro. It wouldn’t come as a surprise to say that 7 years later, this number has not dropped.
For insurance companies, it is therefore a question of efficiency and, above all, agility in order to attract new customers, who, of course, compete for preferential prices.
For this target group of customers, although the financial argument is always a strong one, it is also necessary to emphasise an irreproachable quality of service which begins at the cancellation stage.
This is where the electronic signature is an important ally.
The Hamon law is very clear: all cancellation procedures can be carried out by the new insurer, and no longer by the person insured.
The electronic signature can therefore allow you to cancel the policyholder's old insurance contract and have them sign the new contract!
For the policyholder, the electronic signature is a guarantee of comfort: no need to physically go to the new branch to sign a bundle of contracts, everything can be done directly from any device and at any time of day.
For the insurer, it allows greater efficiency and, above all, it is in line with the challenges of today's insurance sector: more immediacy, agility and omniscience.
A secure and well-defined process
Furthermore, to ensure the validity of the cancellation, it is essential that the legitimacy and validity of the signature are not contested. This is why all electronic signature solutions, including Yousign, send a code to the signatory by SMS or email, in order to guarantee the identity of the signatory and to be able to link it to his signature.
Subsequently, an evidence file is archived for each signature for at least 10 years.
Lastly, the electronic signature is an extremely rigorous process and is governed by a series of French laws (in particular Law No. 2000-230 on information technology and the electronic signature and Articles 1366 and 1367 of the Civil Code, which establish the legal value of the electronic signature) and European laws.
In Europe, it is the eIDAS regulation, which came into force in 2016, that establishes the legal value of the electronic signature. e.
For insurance companies, it is therefore a question of efficiency and, above all, agility in order to attract new customers, who, of course, compete for preferential prices.
The Chatel and Hamon laws have greatly modified the insurance landscape in France, and have established a certain balance between insurers and policyholders by facilitating the cancellation of insurance contracts. Cancelling your insurance contract using an electronic signature is therefore not only desirable, but strongly recommended. It is a guarantee of agility and a proof of modernism for your customers, while presenting undeniable legal guarantees in France and throughout Europe.
In the UK, contract termination can be done electronically at any stage of the contract.
