View more on these topics

Annuity fears at Equality Bill age rate ban

Insurers have raised concerns that the Government’s new Equalities Bill may curb how they are allowed to price annuities and life insurance and potentially push up costs.

The bill, which entered Parliament last week, aims to bring an end to age discrimination across all industries, including insurance. It allows insurers to discriminate on disability, sex, gender realignment, pregnancy and maternity but, in its current form, Standard Life warns it would prevent insurers from determining annuity rates or life insurance premiums based on age.

The Government acknowledges age is a legitimate risk factor, stating: “Not all differential treatment may be discrimination. Some may be justified. For example, our health can deteriorate with age. This affects insurance premiums which are adjus- ted to offer people similar levels of protection but at a cost that reflects how likely they are to call upon it.” It moots exempting insurance so long as pricing is “proportionate” to actuarial data but says it has significant work to do before it could implement such an exemption.

Standard Life head of pensions policy John Lawson says: “As the bill stands, the market in these insurances would be dead. If they introduce proportionate pricing, how proportionate is proportionate? It will never be determined until it goes to court.

“This would be a far from satisfactory outcome. It would create uncertainty and involve excessive monitoring to ensure insurers’ rates are proportionate and their interpretation of proportionate is correct. This would just introduce more cost into the business. Insurers should have been totally exempt from this bill.”

An ABI spokesman says: “The Treasury financial services expert working group report set out why the pension and life insurance market should be exempt from the provisions of the Equality Bill. The industry will reiterate these points in our response to the imminent regulatory impact assessment. Where age or other factors are relevant in assessing risk, we will argue for, and expect, them to be exempt from the Equality Bill.”

Recommended

Off balance

The admission by Barclays that it incorrectly categorised the risk of one its biggest-selling funds will do little to calm the nerves of the public, most of whom probably now rate bankers below estate agents when it comes to those they trust least.

Developed country inflation falls in March

Annual inflation in the Organisation for Co-operation and Development (OECD) area fell to 0.9% in March, according to figures for the month from the OECD Consumer Price index.Consumer prices in the region rose by 0.9% in the year to March 2009, compared with 1.3% in the year to February. Month-on-month, prices rose by 0.3% in […]

Money Marketing scoops awards

Money Marketing swept the board at this year’s prestigious Headline Money awards. MM won personal finance trade title of the year while Lee Jones was mortgage writer of the year and Helen Pow was pensions writer of the year. Former editor John Lappin was crowned journalist of the year while Chris Salih was runner-up as investment writer of the year and Julian Marr was runner-up as columnist of the year.

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment

    Close

    Why register with Money Marketing ?

    Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

    News & analysis delivered directly to your inbox
    Register today to receive our range of news alerts including daily and weekly briefings

    Money Marketing Events
    Be the first to hear about our industry leading conferences, awards, roundtables and more.

    Research and insight
    Take part in and see the results of Money Marketing's flagship investigations into industry trends.

    Have your say
    Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

    Register now

    Having problems?

    Contact us on +44 (0)20 7292 3712

    Lines are open Monday to Friday 9:00am -5.00pm

    Email: customerservices@moneymarketing.com