In the horse trading between the Government and Opposition that took place in the run up to the election the Equality Bill received Royal Assent.
Most of the coverage on insurance has concentrated on anti-age discrimination and its potential impact on income protection insurance, with the abolition of a set retirement age. This will come into effect in 2012 – assuming the government of the time passes the necessary commencement order.
But there is an area where the industry scored a big win. One of the purposes of the Equality Bill was to harmonise discrimination law across different types of discrimination. Here there was a lot of pressure from the age and disability lobbies to adopt the same principles across the board as apply to sex discrimination.
In order for insurers to discriminate on the basis of sex they must show that such discrimination is based on relevant and accurate actuarial and statistical data; that the data is compiled, published and regularly updated in accordance with guidance issued by the Treasury; and that the differences are proportionate having regard to the data. This has been onerous enough for sex as a factor. For age and disability it would have been much more difficult – or perhaps impossible, for example for rare disabilities where there simply isn’t enough raw data and insurers rely instead on the judgement of their medical officers.
Thanks to successful lobbying, the conditions that apply to sex discrimination have not been transferred to other areas and the conditions for disability discrimination etc remain simply that the information used is relevant to the assessment of the risk to be insured; from a source on which it is reasonable to rely; and that it is reasonable to do it.
So is that the end of this debate? Well it is in the UK for now. It is extremely unlikely that any government will wish to reopen the matter in the next Parliament. Unfortunately it will also be important to keep an eye on what is happening in Europe.
Historically, the UK legislative requirements on sex discrimination and insurance originated from an EU Directive and a complex opt out clause negotiated by the UK Government. In the meantime, the bandwagon continued to roll and in 2008 the European Commission published an overarching draft anti-discrimination directive. The directive proposes extending protection from discrimination in the provision of goods, facilities and services to cover disability, age, sexual orientation and religion or belief.
The UK Government ran a 12-week public consultation from May to July 2009 on the European Commission proposal. Not surprisingly some groups argued that differences in treatment on grounds of age and disability should be allowed only if the insurer published up-to-date actuarial or statistical data relevant to each risk area – the approach taken in the Gender Goods and Services Directive.
The draft directive is currently sitting on the desks of the EU Council of Ministers, and only last month a petition was presented by the European Disability Forum, with the support of 1.3 million citizens from various EU countries, to the EU Parliament. Of course, the Directive may remain ‘blocked’ but it would be wise not to take our eye off the ball in Brussels.
Richard Walsh is a director and fellow of SAMI Consulting www.samiconsulting.co.uk
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