Promulgated on August 16 and published in the Official Journal of August 18, Law No. 2022-1158 of August 16, 2022 on emergency measures for the protection of purchasing power falls within the context of rising prices at consumption, and in particular the price of energy, linked to the conflict in Ukraine. It pursues three imperatives: protecting the standard of living of households, consumer protection and energy sovereignty.
Title II of the law is more specifically devoted to consumer protection. In this perspective, a Chapter 1er is devoted to the termination of contracts, which is intended to be facilitated. Sections 17 and 18, in particular, contain provisions relating to the termination of the insurance contract.
Termination “in three clicks”
Article 17, I, of the law of August 16, 2022 modifies article L. 113-14 of the insurance code, relating to the notification of termination of the insurance contract by the insured. The latter currently provides that when the insured has the right to terminate the contract, notification of termination may be made either by letter or on any durable medium, or by declaration made at the head office or at the insurer’s representative, or by extra-judicial act, or, when the insurer proposes the conclusion of the contract by a mode of distance communication, by the same mode of communication, or by any other means provided for by the contract. The insured freely chooses one of these methods. In practice, termination by registered letter is the easiest and most widely used means, both by insurers and by policyholders (in this sense, see Y. Lambert-Faivre and L. Leveneur, Insurance law14e ed., Dalloz, coll. “Précis”, no. 295). For his part, the recipient of the termination confirms in writing the receipt of the notification.
In the future, the termination of the contract will be facilitated, since, according to article 17 of the law, “when an insurance contract covering natural persons outside their professional activities has been concluded electronically or has been concluded by another means and that the insurer, on the day of termination by the subscriber, offers the subscriber the possibility of concluding contracts electronically, termination is made possible according to this same modality”. In practice, the insured will therefore be able to terminate the insurance contract online, using a “cancellation button”, whether the contract was initially concluded electronically or not. The only condition is that on the day of termination the insurer offers an online subscription service. We bet that at the time of dematerialization, this option of termination “in three clicks” will be widely open.
Article 17 of the law continues, by specifying that the insurer provides a free functionality which makes it possible to carry out, by electronic means, the notification and the steps necessary for the termination of the contract. He adds that these provisions come into force on a date fixed by decree, which cannot be later than 1er June 2023. From 1er June 2023 at the latest, insurers will therefore have to provide an easily accessible online “cancellation button”.
These provisions are part of a general trend allowing the insured consumer to easily terminate the insurance contract. Law no. 2014-344 of March 17, 2014 relating to consumption, known as the “Hamon law”, had already marked a major development, by giving consumers the option of infra-annual termination. Thus, for insurance contracts falling within certain branches (these are in particular covered by article R. 113-11 of the insurance code, automobile insurance and home insurance) and which are tacitly renewable, the insured may terminate , at any time, without charge or penalty and without notice, at the end of the period of one year from the conclusion of the contract (on the contributions of the Hamon law in terms of insurance contracts, v. J. Bigot, The Hamon law and the insurance contract, JCP 2014. Doctr. 634). After having been facilitated on the merits, the termination will therefore be further facilitated, this time on the form, with the law of August 16, 2022.
We can welcome this desire to facilitate the termination of the insurance contract, which will allow consumers to benefit more easily from the most attractive offers on the market. However, a limit can be raised. There is a risk of lightly terminating the contract. It will be enough for the insured to click on a simple button online. However, the termination of an insurance contract should not be taken lightly. It leads to the termination of the contract and puts an end to the obligations of the parties. The insurer’s guarantee therefore disappears for the future (on the effects of termination, see Y. Lambert-Faivre and L. Leveneur, op. cit., no. 299). In this sense, we can only approve the continuation of article 17, which obliges the insurer to inform the insured, when confirming receipt of the notification of termination, of the date on which the contract ends. and the effects of termination, on a durable medium and within a reasonable time. This obligation to inform is thus likely to draw the attention of the insured to the consequences of termination.
It remains to be determined what the technical modalities of the implementation of this “cancellation button” will be. Indeed, this facilitated termination of the contract is not without raising practical problems: how to be sure that the one who terminates behind the computer or smartphone screen is indeed the insured? Where exactly should this button be located? On this point, article 17 specifies that a “decree shall in particular lay down the technical methods likely to guarantee identification of the subscriber as well as easy, direct and permanent access to the functionality mentioned in the second paragraph of this II, such as its terms of presentation and use. It determines the information to be provided by the subscriber”. We will therefore have to wait for the decree to know concretely what the means will be implemented. One can imagine, for example, that it will be necessary to connect with an identifier and an associated password in order to terminate the contract. A double verification procedure could also be considered, similar to what exists for online payments.
Article 18 of the law, the provisions of which come into force on 1er January 2023, makes changes concerning affinity insurance, sold in addition to a good or service, also called “warranty extension”. Article L. 112-10 of the Insurance Code currently provides that the consumer who concludes an affinity insurance contract may, if he can prove that he has a previous guarantee for one of the risks covered by this new contract, waive his this new contract, without charge or penalty and as long as it has not been fully executed or the insured has not invoked any guarantee, within fourteen days of the conclusion of the contract. This right of waiver had been put in place by the Hamon law of March 17, 2014, and had been criticized for its complexity. In particular, it implied that the insured be, in practice, able to verify, within fourteen days, whether he already had sufficient cover. Some then considered that it would have been simpler to offer the consumer a right of termination (see J. Bigot, above).
Article 18 of the law of August 16, 2022 obviously tends to simplify the process. It provides for the deletion of the words “if he provides evidence of previous cover for one of the risks covered by this new contract”, which means that the subscriber may terminate the contract without having to justify this waiver by the already being covered. It is therefore no longer a question of forcing the insured to check whether or not he already has sufficient cover. Accordingly, the last two occurrences of the word “new” are deleted. In addition, the waiver period is extended, since it goes from fourteen to thirty days. It is added that “when the insured benefits from one or more free insurance premiums, this period only runs from the payment of all or part of the first premium”. Thus, not only is the contract waiver period longer, but its starting point is postponed in the event that the insured benefits from one or more free premiums. It does not begin to run until the payment of the first premium. Practically, the subscriber could thus renounce the contract several months after its conclusion, without having to justify a pre-existing guarantee, to possibly subscribe to another, more advantageous guarantee.
Articles 17 and 18 of the law of August 16, 2022 thus pursue the stated objective, which is consumer protection. They allow him to easily terminate an insurance contract, and to benefit from the most attractive offers on the market. Questions still remain. With regard to termination by electronic means, we still have to wait for the decree which will set the practical terms. We also issue a reservation on the risk of too easy termination. It is important that the insured be aware that by clicking on a simple button, he makes cover, sometimes mandatory, disappear. Properly informing the insured about the consequences of termination is, in our opinion, a crucial point. The protection of an individual as a consumer should not lead to less protection of the same individual, this time as an insured.