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Report from Law Now - October 2007
Insurance: New sex discrimination law
The Government will shortly be implementing legislation to bring
into force a European directive on sex discrimination which will
apply to all insurance contracts entered into after 21 December
2007.
The new law will have an impact on insurance providers who seek
to differentiate between men and women in setting premiums and
benefits (for example in motor, health and critical illness
insurance). For all new contracts concluded after 21 December,
it will be a legal requirement that the use of sex as a factor
in the calculation of premiums and benefits must not result in
differences in individuals’ premiums/benefits. In addition, the
differences in benefits must not result from costs related to
pregnancy or the fact that a woman has given birth at any time
in the period of 52 weeks ending on the day the treatment occurs
or begins.
However, premiums and benefits may still legitimately differ
between the sexes as long as underlying actuarial and
statistical data on which the calculations for premium/benefits
are based are reliable, regularly updated and available to the
public.
In June 2007, the Treasury published some guidance in draft form
on the data which must be published and regularly updated and
the consultation period on their proposals has just ended. The
key points in that guidance were:
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The data must be published in a form that is intelligible to a non-insurance expert and can be in the form of a table, graph or chart. It must identify the source of data and the period to which it relates.
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The data may be published by insurers on an individual or joint basis and may be collated and published by a third party on behalf of an individual insurer or on behalf of two or more insurers publishing collectively. The ABI and Institute of Actuaries is likely to make collective publication arrangements and insurers could choose to subscribe to their published data instead of making their own arrangements.
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The source/accuracy of the data must be attested by an authorised officer of the firm providing it.
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For products already available on 21 December 2007, the data used as the basis for assessing risks or pricing contracts entered into or reviewed after 21 December 2007 must be published by 30 June 2008.
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For new products introduced after 21 December 2007, any additional data used must be published within six months of entering into the first new contract for such product.
The public consultation period on the new draft law has just ended and the final Regulations will be published shortly, along with final guidance from the Treasury concerning data publication requirements. Insurers should be on the look out for these and be ready to make changes to the way they set premiums and benefits where gender is a factor.
For further information, you can contact:
Kate Murphy
London
44 (0) 20 7367 2869
Stephen Netherway
London
+44 (0) 20 7367 3015
at Law-Now
http://www.law-now.com
Law-Now@cms-cmck.com
Tel: +44 (0)20 7367 2106
Fax: +44 (0)20 7367 2000
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