Right to be forgotten (creditor insurance) and other measures to facilitate access to credit: Law no. 1.561 of 2 July 2024 published

Law no. 1.561 of 2 July 2024 on the right to be forgotten and other measures facilitating access to credit (JDM no. 8705 of 26 July 2024) is the result of Government Bill no. 1085 received by the Parliament on 22 November 2023 and adopted on 27 June 2024, which followed on from Parliamentary Draft Law no. 254 introducing the right to be forgotten in relation to bank loan insurance, adopted on 15 June 2022.

The Law will be supplemented by regulations (Sovereign Order and Ministerial Order).

* * *

Purpose of Law no. 1.561

Law no. 1.561 aims to:

• "facilitate access to bank loans for people who, as a result of life's hazards, find themselves in a situation of aggravated health risk due to illness or disability, insofar as borrower's insurance is often a condition for obtaining loans. In this context, a number of measures should be legally enshrined, going beyond the right to be forgotten". (Explanatory memorandum, p. 1)
• "to provide the body of law with binding means of combating discrimination resulting from the refusal of loan insurance or the application of additional premiums, making it difficult or even impossible for people presenting a "risk" for professionals due to illness or disability to obtain bank credit" (Explanatory memorandum, p. 3).

* * *

SUMMARY

The Monegasque scheme is based on the standards of the French Convention AERAS ("Assurer et Emprunter avec un Risque Aggravé de Santé"), which aims to facilitate access to insurance and credit for people with an aggravated health risk:

→ Enshrinement of the right to be forgotten (subject to conditions), which would make it possible not to declare an old pathology (appearing on the list to be drawn up by sovereign ordinance, which should include cancers and hepatitis C) to an insurer or credit institution when taking out a loan insurance contract, for applications to grant a consumer loan or a professional loan intended for the acquisition of premises or furniture and equipment necessary for the professional activity, or a property loan.

→ Obtaining loan insurance policies on standard or similar terms, i.e. without any additional premium or exclusion of cover, or with capped additional premiums for people who present or have presented an aggravated health risk and have declared it, provided that the pathology from which the person suffers is included in the list of pathologies set out in a reference grid, for property loans or business loans for the acquisition of premises or furniture and equipment necessary for the business (consumer loans excluded).

→ Prohibition on insurers or credit institutions retaining medical information relating to a condition covered by the right to oblivion.

→ Exemption in certain cases from providing the health questionnaire or undergoing medical examinations.

→ A Commission du droit à l'oubli et de la médiation (Commission for the right to be forgotten and mediation) has been set up, one of whose tasks will be to examine individual complaints submitted to it concerning the application of this law and, where appropriate, to mediate between borrowers and insurers or credit institutions.

→ No article of the Law provides for penalties: the ordinary law system of civil liability "will enable injured parties to obtain compensation for any damage caused to them by the failure of banks or insurers to comply with the obligations set out in this Act" (Report on Bill 1085, p. 5).

* * *

Foundations of the reform

The reform is based on the Principality's international commitments in the fight against all forms of discrimination:

• Convention for the Protection of Human Rights (ECHR) (Article 14 - Prohibition of discrimination) ;
• United Nations Convention on the Rights of Persons with Disabilities, whose purpose is to promote, protect and ensure the full and equal enjoyment of all human rights and fundamental freedoms by all persons with disabilities and to promote respect for their inherent dignity (Article 1).

It also draws on the work of international organisations in this area, including:

• OECD Report, How's life? 2020: Measuring well-being (June 2020), OECD Publishing, Paris;
• PACE (Council of Europe) Resolution 2373 of 21 April 2021, Discrimination against persons dealing with chronic and long-term illnesses, Social, Health and Sustainable Development Committee, based on the report by Béatrice FRESKO-ROLFO (Monaco, ALDE), which calls on national authorities not only to adopt a clear definition of the right to oblivion, but also to implement this protection effectively and uniformly.

Finally, Law no. 1.561 takes account of French law (Public Health Code) and insurance regulations in the context of Franco-Monegasque relations:

• Convention AERAS, which in France aims to facilitate access to home or business loans and consumer credit for people whose state of health does not allow them to obtain insurance cover under the standard conditions of the contract, i.e. without any increase in rate or exclusion of cover. It has been revised several times since it was signed on 6 July 2006, and has strengthened the right to oblivion (Article L1141-5, Article L1141-2 of the French Public Health Code). The Agreement is concluded between the French State, professional organisations representing credit institutions, finance companies, insurance companies, mutual insurance companies and provident institutions, as well as national organisations representing patients and users of the healthcare system, and disabled people.
• Convention relating to the regulation of insurance, signed in Paris on 18 May 1963, which provides that insurance regulations established by the Prince's Government "shall be coordinated with those of the French Republic" (Article 1).

* * *

Law contents

The Commission for Social Interests and Various Affairs (CISAD) made several amendments "to ensure that the [Monegasque] system is no less protective than that provided in the neighbouring country". (Report on Bill 1085, p. 3).

¤ General provisions (Chapter I)

• Definitions : "assureur" (insurer); "personne présentant un risque aggravé de santé" (person presenting an aggravated health ris); "assurance emprunteur" (loan insurance); "surprime d'assurance" (additional premium). (art. 1er). NB: CISAD deleted the definition of "credit institution" on the grounds that "it is superfluous insofar as, in accordance with the Franco-Monegasque agreements on financial and banking matters, the French definition of "credit institution" is directly applicable in the Principality of Monaco" (Report on Bill No. 1085, p. 5). See Sovereign Order 13.889 of 18 February 1999 on the regulations applicable to credit institutions in the Principality, and the definition in art. L511-1 of the French Monetary and Financial Code.
• Definition by Sovereign Order of the procedures relating to the formation and examination of the insurance application, the content and communication of the decision of the insurer and the credit institution, as well as the period of validity of any insurance proposal. (art. 2)
• Obligation for credit institutions or insurers to provide an information document on the measures provided for by the Law (at the same time as the health questionnaire), to persons taking out an insurance contract in connection with a loan falling within the terms of the Law. (art. 2)
  

¤ Measures to assist access to credit for people with an aggravated health risk (Chapiter II)

→ RIGHT TO BE FORGOTTEN/TO OBLIVION (Section I)

• Definition of the right to be forgotten: all persons benefit from a right to oblivion enabling them not to declare an old pathology, appearing on the list established by sovereign ordinance, to an insurer or credit institution when taking out a loan insurance contract. (art. 3)
• Conditions for exercising the right to be forgotten (the details of which will be specified by Sovereign Order) (art. 4):
  • 1) The request for insurance must be made in connection with an application for a) a consumer loan for a specific purchase, or b) a business loan for the purchase of premises or furniture and equipment required for the business, or c) a property loan. NB: CISAD replaced the initial reference to an "assigned or dedicated" consumer loan with "specific purchase", on the grounds that "Monegasque legislation does not refer to either of these two concepts in the legislative texts in force" and that "In addition, the AERAS convention does not make any distinction in terms of consumer credit between those that would be "assigned" and "dedicated". It refers only to "consumer credit [that] is intended for a specific purchase [...]. Ultimately, this definition corresponds to the definition of "earmarked" credit accepted in the legislation of the neighbouring country" (Report on Bill 1085, p. 6).
  • 2) The therapeutic protocol must have been completed for a period (set by Sovereign Order) not exceeding 5 years. Provision is made to extend the benefit of these provisions "to pathologies, in particular chronic pathologies, whose therapeutic protocol cannot be considered to have been completed, provided that therapeutic progress and scientific data attest to the ability of the treatments concerned to significantly and durably limit their effects. NB: CISAD made this additional amendment on the grounds that "requiring the therapeutic protocol to be fully completed as a condition of the right to be forgotten would have had the effect of excluding people suffering from certain chronic and incurable diseases requiring lifelong treatment, such as HIV. (...) The scheme is therefore intended to be as favourable as that in force in the neighbouring country" (Report on Bill 1085, pp. 3-4).
  • 3) The insurance contract must expire before the borrower reaches a certain age (set by Sovereign Order), which must not be less than 71. NB: CISAD has drawn on the standards of the French AERA convention to specify "a minimum age below which the borrower may not be excluded from the scheme". (Report on Bill 1085, p. 3).
• The borrower must declare to the insurer or credit institution any pathology or condition other than those on the list established by the aforementioned Sovereign Order, any risk factor, any current situation of disability or inability to work, whether or not related to the pathologies covered by the right to forget, or any current consequence known to the borrower, at the time of applying for a loan, of one of these pathologies, conditions or related treatments. (art. 5) NB: The CISAD abolished the requirement to declare all the side effects incurred as a result of the pathology "too exhaustive and of an uncertain nature", limiting it to only those consequences that are known and current at the time of the loan application." (Report on Bill 1085, p. 7).
• Prohibitions on insurers or credit institutions from: retaining and storing any medical information relating to a condition covered by the "right to be forgotten", even if the borrower mentions it; and applying any additional premium or exclusion of cover to the borrower because of a condition on the aforementioned list. (art. 6)

→ BBENEFIT FROM INSURANCE WITHOUT SURPLUS OR EXCLUSION OF COVERAGE OR WITH A FLAT SURPLUS (Section II)

• Any person who has declared to an insurer or credit institution that he or she has a medical condition, including a chronic condition, which constitutes an aggravated health risk and which is listed in a reference grid (defined by ministerial decree) may benefit from insurance, without an additional premium or exclusion of cover or with an additional premium capped, subject to certain conditions (art. 7, 8) :
  • 1) The request for insurance must be made in connection with an application for a) a property loan or b) a business loan for the acquisition of premises or furniture and equipment required for the business;
  • 2) In the case of the acquisition of a principal residence, the insured amount must relate to property loans, the insured portion of which does not exceed an amount (set by Sovereign Order) which may not be less than 420,000 euros, not including bridging loans. In other cases of property loans and business loans, the sum insured would apply to contracts relating to a cumulative outstanding loan, the insured portion of which does not exceed a certain amount (set by Sovereign Order);
  • 3) The insurance contract must expire before the borrower reaches an age (set by sovereign ordinance) that cannot be less than 71.
  • The reference grid would list pathologies for which the available scientific data allow us to conclude that loan insurance can be granted under conditions that are close to the standard conditions. It would define, by pathology, the periods from which loan insurance is granted, specifying in particular the reference date from which these periods run. It would specify the criteria for accessing these insurance conditions and the maximum excess premium rates applicable. The terms and deadlines of the reference grid must be regularly updated in line with therapeutic progress and scientific data.

• Prohibition on applying both an additional premium and an exclusion of cover for the same medical condition to people with an aggravated health risk when taking out a mortgage or business loan. (art. 9).

→ EXEMPTION FROM PROVIDING INFORMATION RELATING TO HEALTH OR FROM SUBMITTING TO MEDICAL EXAMINATIONS (Section III)

• The insurer may not request any information relating to the insured's state of health or any medical examination when the purpose of the insurance contract is to guarantee, in the event of the occurrence of one of the risks defined in the contract, either the total or partial repayment of the amount outstanding under a consumer credit contract for a specific purchase, or the payment of all or part of the instalments of the said loan, subject to certain conditions (art. 10):
  • 1) The amount insured does not exceed an amount (set by Sovereign Order) which may not be less than 17,000 euros;
  • 2) he repayment period is less than or equal to a period (fixed by Sovereign Order) which may not be less than 4 years;
  • 3) The age of the borrower does not exceed an age (fixed by Sovereign Order) of at least 50 years;
  • 4) the borrower declares on his or her honour that he or she will not take out loans in excess of the aforementioned ceiling.
  • NB: CISAD has adopted the minimum duration, age and amount applied in France.

• No information relating to the insured's state of health or medical examination may be requested by the insurer when the purpose of the insurance contract is to guarantee, in the event of the occurrence of one of the risks defined in the contract, either the total or partial repayment of the amount outstanding under a property loan contract for the acquisition of a property for residential or professional use, or the payment of all or part of the instalments on the said loan, subject to certain conditions (art. 11):
  • 1) The insured portion of the cumulative outstanding loan contracts does not exceed an amount (set by Sovereign Order) which may not be less than 200,000 euros;
  • 2) The repayment due date for the credit contracted is before the borrower reaches an age (set by Sovereign Order) which may not be less than 60.
  • NB: CISAD has also used the amounts and minimum ages applied in France..

¤ Commission du droit à l'oubli et de la médiation (Chapter III) (art. 12 à 15)

• Establishment of a joint Commission responsible, inter alia, for examining individual complaints concerning the application of the law and, where appropriate, for mediating between borrowers on the one hand and insurers or credit institutions on the other.
• CISAD has added to its previous remit (the only one initially provided for in the Bill), that of being consulted by the Minister of State when drafting and amending the implementing regulations (plenary formation), and drawing up an annual report that is made public, presenting in particular a statistical statement of individual complaints and the action taken, guaranteeing the required anonymity and confidentiality.
• The plenary committee of the Commission is made up of 1) representatives of insurance and credit professionals duly authorised to carry out their activity in Monaco; 2) associations representing patients duly declared and made public in accordance with the provisions of law n° 1.355 of 23 December 2008 concerning associations and federations of associations, as amended; 3) doctors who are or have been duly registered with the Monaco Medical Association. The Commission appoints, from among its members, a joint select committee when it is called upon to examine individual complaints.
• The Commission's secretariat is provided by an administrative department designated by sovereign ordinance. Its composition and mode of operation are also defined by Sovereign Order.

* * *