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Europe's insurers seek clarity on proposed anti-discrimination Directive

An insurance industry group has asked the European Commission to confirm that its proposals for a new anti-discrimination law will allow insurers to take into account medical data relevant to age and disability when assessing risks.23 Sep 2008

The CEA, which represents 33 national insurance associations, says that a lack of clarity in the Commission's anti-discrimination plans is a concern for the industry.

In July this year, the European Commission adopted a proposal for a new Directive prohibiting discrimination in the provision of services on the grounds of age, disability, sexual orientation and religion or belief.  

The draft Directive recognises that age or disability can be an essential element of the assessment of insurance risk. Under the proposals, member states would be able to permit "proportionate differences in treatment where, for the product in question, the use of age or disability is a key factor in the assessment of risk based on relevant and accurate actuarial or statistical data".

The CEA has welcomed the concession, but wants clarification that this data includes medical information.

"Private insurers need, in addition to actuarial and statistical data, to be able to rely on a wide range of relevant sources including medical reports, medical research and medical experience for a comprehensive risk assessment," it said in a position paper.  

The issue, it says, is causing "major concerns" for the insurance industry. Restricting the way insurers can assess risk could mean some products becoming unaffordable or being withdrawn form the market altogether.

"These products serve to cover the most important risks of life, such as the financial consequences of death, occupational disability, total disability, disease and the need for long-term care," said the CEA. "However, these are exactly the products for which there is an increasing need due to cuts in the EU member states' social security systems caused by demographic changes". 

The federation also opposes the provision that would leave it up to member states to decide whether to allow differences in treatment in the provision of insurance and other financial services. The opt-out, it believes, will only create legal uncertainty for consumers.

The Commission will be holding further discussions with the insurance industry and other relevant stakeholders to obtain a greater understanding of the areas where age or disability are relevant factors in the design and pricing of products.

Want more content like this? This story was written by the insurance and reinsurance legal experts at Pinsent Masons, the law firm behind Out-Law.COM. See our legal info for Insurance and Reinsurance.