Gender discrimination and insurance
This guide is based on UK law and was last updated on 20th
August 2008.
UK insurers who use gender as a factor in the calculation of
premiums and benefits are now required to publish the data on which
such assessment is based.
The rule stems from the UK's implementation of the EU Gender
Directive, which requires all member states to apply the principle
of equal treatment between men and women in the access to and the
supply of goods and services, including insurance.
Insurers in the UK were already prevented from treating men and
women differently under the Sex Discrimination Act 1975 (and in
Northern Ireland the Sex Discrimination (Northern Ireland) Order
1976).
The Act, however, included an exemption allowing insurers to
discriminate on gender grounds, provided it was with reference to
"actuarial or other data from a source on which it was reasonable
to rely" and the treatment was reasonable "having regard to that
data and any other relevant factors".
As a result, gender has continued to be taken into account in
the calculation of premiums and benefits in life and critical
illness policies, annuities, private medical insurance, travel
insurance, motor insurance and other types of cover where data
shows that the sex of the insured can have an effect on the
risk.
The Directive
Under the Directive, the insurance exemption has been tightened
up. Member states can still allow differences in treatment where
gender is a determining factor in the assessment of risk, provided
they are proportionate and based on relevant and accurate actuarial
and statistical data which is reliable, regularly updated and
available to the public.
The Directive also prohibits discrimination relating to
pregnancy and maternity and direct discrimination on the grounds of
gender reassignment.
In the UK, the 1975 Act has been updated by the Sex
Discrimination Act 1975 (Amendment) Regulations 2008 which came
into force on 6th April 2008 and apply to insurance contracts
entered into on or after that date.
In addition to meeting the requirements of the Directive, the
regulations confirm that insurance and related financial services
can be provided to members of only one sex in relation to risks
that affect only that sex.
Publication
The deadline for publishing data for existing insurance products
was 30th June 2008. For new products, publication must take place
within 6 months of the policy first being sold.
Guidance on compiling, publishing and updating data was
published by the Treasury in March 2008 and applies to all
insurance products where gender is taken into account in the
calculation of premiums and benefits.
Policies where gender does not affect premiums and benefits are
outside its scope, even if gender is a factor in the
assessment of risk. Nor does the guidance apply to group
insurance provided to employees by their employers.
The minimum requirements for publication vary according to
policy type. In general, however, the information must be in plain
English and in a form readily understood by someone who is not an
insurance expert.
The source and accuracy of the data must be vouched for by
an authorised officer of the firm providing it and it must be
updated regularly: at least every four years for life insurance,
annuities, critical illness and income protection policies, every
three years for motor and private medical insurance and every two
years for policies (including new policies) that do not fall within
the other categories.
Insurers can choose to publish data individually or on a joint
basis as long as they are not price-fixing or otherwise breaching
competition law. An insurer that does not publish its own data and
does not take part in a collective publication scheme can rely on
data published by other insurers, provided that is the data it uses
in calculating premiums and benefits.
The Association of British Insurers (ABI), working closely with
the Continuous Mortality Investigation (CMI), publishes data on its
website on gender-based differences in motor and medical insurance
and (via a link to the CMI website) on life insurance and
annuities, critical Illness and income protection.
An insurer wishing to participate in this scheme is required to
sign a standard letter formally appointing the ABI and CMI to
publish data on its behalf and to provide a statement from an
authorised officer confirming the source and accuracy of the data
it has contributed.
Pregnancy and maternity
The regulations make it unlawful to treat a woman less
favourably on the grounds of her pregnancy or maternity when
providing goods and services
The Directive does not define "maternity", so the Government has
chosen to adopt a period of 26 weeks after the birth, which
reflects the period of a woman's ordinary maternity leave
entitlement in the employment context. After 26 weeks, a woman
would be able to pursue a claim for direct or indirect
discrimination on grounds of gender in the normal way.
The regulations include an exemption where a provider reasonably
thinks that providing goods, facilities or services at all or
without certain conditions would, because of the pregnancy, create
a risk to a woman's health or safety. This must, however, be in
accordance with a specific policy applied by the provider.
The exemption reflects concerns raised by the aviation industry
that airlines' policy of not carrying late-term pregnant women on
flights for health and safety reasons would be in breach of the
Act. The exclusion might also apply to dangerous activities such as
bungee jumping or rock climbing.
In the insurance context, any differences in treatment which
result from costs related to pregnancy or maternity will be
unlawful. There is no exemption relating to the use of actuarial or
other data.
The Government has, however, allowed insurers extra time to
prepare for the new rule, which will come into force on 22nd
December 2008.
Gender reassignment
The regulations prohibit direct discrimination on the grounds
that a person intends to undergo, is undergoing or has undergone
gender reassignment.
For insurers, premiums and benefits should be calculated on the
basis of a transsexual person's legal sex, which is the sex on
their birth certificate unless they have legally changed their sex
and have a Gender Recognition Certificate.
Proving discrimination
The regulations make it easier for claimants to bring successful
discrimination claims by reversing the burden of proof.
The claimant must establish facts which would, in the absence of
an adequate explanation from the respondent, lead to a conclusion
that they had been discriminated against. It is then for the
respondent to show a non-discriminatory reason for its actions.
There is still no upper limit on the damages that can be awarded
for a successful discrimination claim.
The Equality Bill
The Government is proposing to consolidate UK discrimination
legislation (including the amended Sex Discrimination Act) into a
single Equality Bill, which will also prohibit age discrimination
in the provision of goods and services.
As part of this exercise, it is also considering whether to
allow discrimination claims to be brought by representative bodies
on behalf of multiple claimants.
Contact: Katie Tucker (katie.tucker@pinsentmasons.com
/ 020 7667 0116)
See:
See also: Age discrimination and
insurance, an OUT-LAW Guide
