Green paper proposes age exemptions around insurance

Government proposals could mean there are likely to be exemptions made on age differentiation on the provision of insurance premiums and products, which could keep costs down for employers.

The Discrimination Law Review: A framework for fairness, published today, sets out its proposals for a single equality bill. On the issue of providing protection against discrimination on the grounds of age in the provision of goods; facilities or services, it states it is likely to allow different treatment for insurances, provided that the treatment is: “reasonable and based on actuarial or other data or information from a source on which it was reasonable to rely”.

It also states that the general principle underlying any legislation would mean that a difference in treatment based on age should not be permitted unless it can be justified. The provision of insurance is one such area where legislation would need to include specific exemptions to enable justifiable differential treatment “so long as that treatment was reasonable and based on objective evidence”.

Hugh Savill, director of public affairs at the Association of British Insurers, said the proposals will not make any real difference to insurance companies and the costs of their products. “I think as far as insurance companies are concerned this is more putting things to rest rather than the calm before the storm.”

The document proposes to amend the insurance provision in the Sex Discrimination Act in order to meet requirements in the European Union Gender Directive. This would render it necessary for data relevant to establishing the case for differential treatment by gender to be published and regularly updated.

Sam Mercer, CEO of the Employers Forum on Age, said: “My concern is, are [insurance companies] going to have to spend a lot of time defending themselves against challenges of discrimination? The insurance industry is competitive and people don’t want to reveal the data that they’re using to calculate premiums because that’s giving competitors access to their privileged knowledge.

“What is interesting is that this green paper seems to acknowledge that it is ok to allow different treatment by insurers based on age (where supported by data) – this is not extended to employers currently under the Age Regulations (Employment) and is one of the reasons employers are struggling in the provision of insured benefits to older workers.”

The document, published by the Communities and Local Government department, has invited responses to its proposals.