Excessively expensive contracts covered by an ACPR warning

Insurance is a lucrative market. The Banque de France-backed Prudential Control and Resolution Authority (ACPR), which in January 2024 allowed the withdrawal of approvals from three institutions, appears to have certain insurers in its sights. Life accident guarantees are specifically blacklisted.

The ACPR has taken action to definitively withdraw the authorizations of the credit institution Dexia Credit Local on January 1, 2024, a guarantee lending company for agricultural and food dairy companies Sogal-Socamuel, on January 2, 2024, for violating the rules. and paying institution Wilmington Trust SAS on January 29, 2024.

The disciplined body now has some expensive and low-paying insurance contracts in its sights. As part of its annual conferences, the banking and insurance consumer protection morning held at the Maison du Barreau on March 6, 2024, was dedicated to life accident guarantee (GAV) contracts that cover ‘from ordinary injury to the death of the subscriber. In terms of figures, according to 2022 figures, around 30 million contracts have been established for 3 billion in annual contributions.

18,000 disputes are registered annually

The ACPR immediately notes in its report, the large number of complaints which amount to 18,000 per year, of which 5,000 relate to compensation and 3,500 to termination. The authorities are pointing fingers in its investigation “Strong Heterogeneity of Insurance Contracts”. Also in the scope of coverage, benefits, trigger threshold for coverage or different guarantees paid according to the age of the insured depending on the contract.

Inadequate care has been taken of the interest of the customer

Also “Considering the interest of the customer while subscribing” is specifically indexed keeping in mind “Inadequacy of advice, especially non-existence of collection of requirements”And “Insufficient Information on Capacity Rate”which results in “Unable to understand methods of calculating disability”, noted among other anomalies. ACPR also notes “Vague and yet very effective warranty restrictions”.

Changes in insurance contracts for the elderly

Among the complaints approved by the authority “Contract Modification for the Elderly” (age limit between 71 and 75 years), with reductions in compensation levels, reductions in scope of benefits or numerous denials of coverage related to pre-existing health conditions.

Ultimately, the ACPR asks insurers to consider the consumer’s interest “Absence of specific monitoring of elderly population”, The “Slight Pursuit of Controversy”, The “Little or no specific follow-up of complaints”, “ Over 80% rejection rate of support in some actors »

and ” A little tracking by reason ».

Overall, only 40 to 50% of the client’s interest is considered in the claim-premium ratio. For certain guarantees, it is estimated to be less than 30%. A summary which is perhaps the most well-expressed dire warning from the ACPR regarding GAV.