Mental health: Are insurers breaching Equality Act?

Insurers must ensure that their evidence base is solid when declining or rating cover to people with a history of mental ill-health to avoid breaching the Equality Act 2010, Helen Undy, chief executive, Money & Mental Health Policy Institute, warned the Protection Review Conference today.

Speaking as part of a keynote address, Undy said that insurers are entitled to protect themselves from unmanageable risk providing their decision is based on "sound evidence" however she questioned whether this was often case when it comes to underwriting for those with a history of mental illness.

The Equality Act legally protects people from discrimination in wider society and at work. This includes those who have a physical or mental impairment which has a substantial and long-term negative effect on daily activities. However Undy argued that insurers may not be using "accurate" information especially where a condition is historic, or when a condition is being managed with medication.

Using travel insurance as an example, she cited price increases of 40% to 400% for depression and 80% to 2000% for bipolar even when symptoms were not being experienced. An issue being address as part of the FCA's consultation on access to insurance, she reminded the audience.

"Some degree of price variation according to risk in cases of disability is expected in insurance markets, and the Equality Act 2010 includes specific clauses allowing this, as long as the differentiation is driven by reference to relevant and reasonable information, and is used in a reasonable way to price the additional risk," she said. "The commercial sensitivities of insurers' pricing and risk models, however, mean that the information used to assess and price risk is not in the public domain. This means it is impossible, looking from the outside in, to truly assess whether the type of price dispersion demonstrated in this market is reasonable, and whether firms are complying with their Equality Act duties."

Accessibility

Undy also questioned the accessibility of insurers to those who struggle with communication. More than half (54%) of people who have experienced mental health problems struggle to engage with providers by telephone or find it distressing to do so, causing an "access barrier", she said.

This statistic echoed the findings announced by earlier at the event by Protection Review's Kevin Carr that revealed that almost half of consumers would rather answer questions about mental health online.

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• Topics
• Individual Protection
• Underwriting
• mental health
• Protection Review
• Helen Undy