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.”