The insurance industry looks to have done an very good job in its lobbying over the Equality Bill and, in particular, heading off the threat that some classes of insurance, such as travel and motor, might find themselves in a straightjacket when it comes to age-related underwriting.The government has agreed to include an
exemption for financial services from the strict rules prohibiting age-related discrimination when it publishes the legislative orders that will implement the Bill's provisions (assuming that is that it is passed by Parliament before the General Election is called). This doesn't let the insurance industry off the hook entirely, however, as a degree of compromise has been necessary in order to secure the promised exemption.
The two key features of the new responsibilities that will be thrown on the industry are to produce collective data data that shows age-related underwriting to be justified and to provide a 'signposting' service to help older people find an insurer that will offer them motor or travel insurance if they are having difficulty finding cover. The response from the
Association of British Insurers suggests that the insurance industry will have no difficulty in meeting the requirement for a signposting scheme, although it has been silent so far on the collection and publication of data and has previously voiced concerns about this. The argument against it has been that it could compromise the competitive position of insurers that have specialised in insurance for older people. I think the danger of this is fairly limited but if it does lead to more insurers feeling confident about offering competitive rates for older people then consumers will benefit and it is hard to argue against that.
Brokers have actually welcomed the signposting proposals enthusiastically and see a key role for themselves in developing these.
The industry has been down this road before with commercial insurance for small businesses in inner city areas in the late 1980s and early 1990s. In the wake of a series of riots in inner city areas the insurance industry was accused of red-lining some districts. In those days the industry was rather less responsive to such concerns and initially point blank refused to accept that there was a problem. This, predictably, just increased the pressure on the industry until some wiser voices at the ABI were eventually listened to and a referral scheme was set up. This worked and the furore eventually died down.
There have been no screaming headlines this time as the industry has quietly engaged with government before the issue got out of hand. Both sides deserve credit for that.
The Bill itself is making slow progress through the
House of Lords at the moment where it is in its committee stage with the next session not planned until Tuesday 9 February. Even if that turns out to be the last committee session it will still have to go back to the whole House of Lords for a third reading debate before then going to the Commons for the entire procedure to be repeated. You can see why some groups - especially the churches - are taking the opportunity to cut up rough over parts of the Bill they do not like as the government cannot afford any delays in the passage of this flagship Bill if it is to get onto the statute book before the General Election is called. Latest rumours are that there will be no formal Easter recess in order to make sure this and other key Bills get through.
