On March 14, the Autorité de Contrôle Prudentiel et de Résolution (ACPR) hosted the banking and insurance industries for its Matinée de la protection des clientèles. From the opening address by ACPR Vice-President Jean-Paul Faugère, the tone was set:

Mr Faugère reiterated the crucial importance of placing the customer's interest at the heart of banking and insurance practices. He pointed out that, despite regulatory changes and tighter controls, there are still discrepancies in the marketing of certain products, notably loan insurance, funeral insurance and para-banking products.

The message was clear: professionals must go beyond mere compliance with legal obligations, and ensure that products sold really do meet customers' needs. Transparency, contract clarity and quality of advice must be reinforced to restore customer confidence. The morning was marked by critical analyses and recommendations aimed at improving industry practices.

A detailed review of the morning's topics:

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Product benefits for insurance customers

The ACPR reminds us that the value of products for the customer remains a central concern, particularly in loan insurance.

Several criticisms have been made:

• Low "value for money": The European Insurance and Occupational Pensions Authority (EIOPA) has noted that loan insurance has a low claims/premiums ratio, suggesting excessive profitability to the detriment of policyholders.
• Long deductible and waiting periods : up to 12 months.
• Little monitoring of contracts in terms of customer interests.
• High claim refusal rates for consumer credit and property loan insurance.
• Need for clarity: Guarantees are considered complex and difficult for borrowers to understand.

The ACPR recommends that concrete measures be taken to improve the match between products and customer needs.
Among the areas for improvement identified are :

• revision of exclusions and waiting periods
• better market targeting
• a differentiation of offers according to the assets financed
• rate adjustments to ensure a better balance between cost and service.

Parabanking products: insufficient added value

Parabank products have been particularly criticized:

• Very low utilization rate: Some warranties have a utilization rate of less than 1%, reflecting a lack of fit with customer expectations.
• Disproportionate costs: The sum of services billed in bundled offers is often higher than if each service were subscribed to individually.
• High commissions: Some products feature excessive margins, to the detriment of the customer.

The ACPR insists on the need to improve the distribution of these products to better meet customer needs. Inspections have revealed inappropriate sales pitches, presenting certain offers as financially advantageous, without any real consideration of the individual situation of policyholders.

The authority also noted cases where services were unusable, inadequate guarantees and multiple contracts covering the same damage, underlining a lack of rigor in the marketing of these products.

Funeral contracts: ACPR calls for implementation of the Comité Consultatif du Secteur Financier (CCSF) opinion of October 8, 2024

• Lack of clarity on fees: Policyholders are not always informed of the total cost of their contract over time, nor of the cost of surrender.
• Incomplete or misleading information: The identification of the distributor, exclusions and the obligation to allocate the capital to funeral expenses are not always explained.
• Questionable sales practices: pre-ticked options and pressure to sell.

The ACPR insists on stronger customer advice and greater pricing transparency. The ACPR also referred to the CCSF's opinion of October 8, 2024 on these contracts, which it firmly expects to be implemented.

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Conclusion:

Nathalie Aufauvre, General Secretary of the ACPR, concluded the morning's proceedings with a clear message to the insurance industry: "we can do better". She emphasized that, despite regulatory advances and controls, bad practices persist, and the customer's interest is still not sufficiently taken into account. She stressed the importance of strengthening transparency and the quality of advice, in order to re-establish and preserve a relationship of trust between customers and market players. In putting the consumer back at the heart of its concerns throughout the morning, and in the very words of its Vice-Chairman who reminded us that "compliance rules make the customer's interest a cardinal principle", the ACPR forcefully reaffirms its commitment to seeing this interest respected, and consequently the heightened vigilance it will be demonstrating on these issues in the months to come. You can replay all the videos of this morning's event on the ACPR website.